KUALA LUMPUR: The cumulative foreign fund outflow of Malaysian equities rose to RM9.8 billion last week, significantly surpassing the RM6.9 billion outflow for the entire 2014, according to MIDF Research.

In his weekly fund flow report yesterday, MIDF Research head Zulkifli Hamzah said foreign investors have been net sellers on Bursa Malaysia for 11 consecutive weeks.

He said last week that foreign investors sold equity listed on the open market on Bursa amounting to RM811.7 million on a net basis. This was the seventh highest this year.

Zulkifli said foreigners were net sellers every day last week and had been selling for the last 17 trading days.

“Indeed, selling had been unrelentless and net outflow had been recorded in the last 38 out of 39 trading days. There was heavy foreign withdrawal on Wednesday when investors offloaded RM374 million, the third highest in a day this year. However, we reiterate our view that the heaviest of the foreign selldown is in the past,” he said.

Zulkifli added that last week, despite the global turmoil, the amount offloaded by foreigners exceeded the RM200 million mark only on Wednesday.

He said there was no pick-up in selling momentum thereafter.

He noted that foreign participation rate remained at the upper end of the “moderate” category, with daily volume for the week averaging RM921 million.

“However, gross volume exceeded the RM1 billion mark only on Wednesday.

“It tapered to less than RM1 billion thereafter, and was down to RM719 million on Friday,” he said.

Zulkifli said local institutions mopped up RM785.7 million on the open market last week on a declining participation rate of RM1.92 billion, the first time it dipped below the RM2 billion mark in four weeks.

“Local funds have mopped up RM11.2 billion this year, compared with RM8.2 billion in 2014.

“Retailers started nibbling in the market with a marginal net purchase of RM26 million.

“We note that retail activity has been gaining momentum, although it is still at moderate level,” he said.

Commenting on the regional markets, Zulkifli said except for China and Europe, equity markets in general sank further into the red zone last week.

However, he said markets rallied last Friday as optimism rose on a potential Greece resolution (explaining that as it turned out, eurozone leaders on Sunday gave Greece three days to enact into law its list of demands in exchange for the third bailout in five years).

He said that last week, China’s market recovered some lost ground after three weeks of meltdown. The CSI 300 rose 5.7% last week after losing 27% in the preceding three weeks.

Zulkifli said investors were apparently responding to a slew of extraordinary measures announced by the government to stem the market’s free fall.

“After a relatively quiet fortnight, global funds shifted out of Asian equity heavily last week. There was an exodus from South Korea and Taiwan markets. Among emerging Asia, there was noticeable exit from Thailand,” he said.

This article first appeared in The Edge Financial Daily, on July 14, 2015.