This article first appeared in The Edge Financial Daily on February 19, 2019

KUALA LUMPUR: Foreign funds withdrew RM369.2 million from Malaysian equities on Bursa Malaysia last week, compared to a net inflow of RM163.2 million in the prior week, according to MIDF Amanah Investment Bank Bhd Research.

In his weekly fund flow report, MIDF Research’s Adam M Rahim said this was the largest weekly foreign net outflow in eight weeks.

“On a daily basis, the five-day foreign net buying streak came to an end [last] Monday as global funds sold RM41.6 million net of local equities.

But foreign investors slowly returned to Bursa last Tuesday at a tune of RM6.6 million net, the lowest level in a day since early November last year,” he said.

However, Adam said RM122.1 million net of equities were taken out by foreign funds last Wednesday as investors ignored US President Donald Trump’s flexibility on the deadline for trade negotiations with Beijing.

Likewise, he said the local bourse lost 2.11 points or 0.1% to end at 1,685, the lowest close during the week.

Meanwhile, Adam said other Asian peers namely South Korea and Taiwan recorded sizeable foreign net inflows.

“While foreign net selling still occurred [last] Thursday and Friday, the pace slowed down to RM106.4 million and RM105.7 million, respectively.

“Malaysia’s 4Q18 (fourth quarter of 2018) GDP (gross domestic product) growth of 4.7% year-on-year (y-o-y), which was above market expectations of +4.5% y-o-y estimates, helped to ease the jitters coming from the deceleration in China’s factory inflation in January 2019, which slowed down for the seventh uninterrupted month,” he said.

Adam said for the first half of February 2019, offshore investors have so far disposed of RM206 million net, lowering the year-to-date (YTD) foreign net inflow into Malaysia to RM820.1 million.

“On the regional front, Malaysia is now the nation with the lowest foreign net inflow amongst the four Asean markets we monitor with Indonesia taking the lead with a YTD net inflow above RM3 billion while Thailand is the only one with a net outflow,” he said.

Adam said participation among all investor groups increased during the week.

He said foreign investors recorded the smallest weekly advance in average daily traded value, increasing by 15.3% to breach above the healthy level of RM1 billion.