2019 set to be another year of foreign net outflow for Malaysia, YTD outflow at RM10.99b

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KUALA LUMPUR (Dec 30): Offshore investors continued to enter Malaysia and mopped up RM69.9 million from Bursa last week, compared to RM68.7 million net bought in the week before, according to MIDF Amanah Investment Bank Bhd Research.

In his weekly fund flow report today, MIDF Research’s Adam M Rahim said in 2019, international funds were net buyers for a total of 18 weeks.

“Bursa began the week on the right foot as international funds mopped up RM74.7 million net of local equities on Monday.

“As such, the local stock barometer was lifted higher by 0.3% to close at 1,614.2 points, a level not observed since August 2019,” he said.

Adam said the eve of Christmas then saw foreign investors retreating to the sidelines as they disposed of local equities at a tune of RM19.6 million net, dragging the local bourse by 0.6% to settle at 1,604.2 points.

He said as markets reopened on Thursday, international funds continued to reduce exposure in local equities but at a very slow pace of only RM1.8 million net.

“The reduction in foreign net selling was mainly attributable to the news that the US and China will have a signing ceremony to commemorate the first phase of the US-China trade deal agreed this month.

“International funds later turned net buyers on Friday, snapping up RM16.6 million net of local equities following the rally in local plantation stocks in line with the rise in crude palm oil price,” he said.

Adam said with two more trading days before the month of December ends, the month has so far seen a foreign net outflow of RM1.06 billion.

He said as such, 2019 is set to be another year of foreign net outflow for Malaysia with the year-to-date foreign net outflow as of last Friday standing at RM10.99 billion, lower than last year’s total foreign net outflow of RM11.69 billion.

“In terms of participation during the festive week, it was no surprise that foreign investors experienced sharpest decline in average daily traded value (ADTV) amongst the other investor groups, dropping 61.4% to reach below the RM1 billion mark at RM489.5 million,” he said.