KUALA LUMPUR (July 22): Foreign funds sold RM6.9 million of Malaysian equity last week, compared to buying RM84.9 million the prior week, according to MIDF Amanah Investment Bank Bhd Research.

In his weekly fund flow report today, MIDF Research's Adam M Rahim said this was the smallest weekly foreign net outflow thus far this year.

"A bout of foreign funds entered Bursa at a tune of RM17.8 million on Monday as the -1.3% year-on-year drop in China's exports for June 2019 was [less] than market expectations.

"The local bourse took cue as it advanced marginally by 0.2% to settle at 1,672 points on the same day," he said.

Adam said meanwhile, foreign investors disposed of RM42.6 million net of equities on Tuesday ahead of the release of US retail sales data. Foreign net selling remained on Wednesday albeit at a slightly slower pace of RM39.8 million.

He said sentiment was dampened mainly by the possibility of US President Donald Trump imposing additional tariffs on China despite promising to hold off more duties in a trade-war truce reached with China's Xi Jinping last month.

"Positive vibes returned to the market on Thursday with international funds accumulating RM40.2 million net of local equities.

"Risk-on mood was reignited by the rally in Taiwanese chip makers following better forward guidance by Taiwan Semiconductor Manufacturing Company underpinned by stronger chip demand," he said.

Adam said Friday then saw a foreign net inflow of RM17.5 million, coinciding with the FBM KLCI's first advance in four days to close 0.6% higher at 1,658 points.

He said the mood on Friday was supported by the latest phone talks between senior US and China officials regarding trade.

"The month of July has so far seen a foreign net inflow of RM308.2 million.

"Meanwhile the year-to-date foreign net outflow from Malaysia stands at RM4.36 billion," he said.

Adam said that in contrast, the other six Asian markets MIDF Research monitors (Korea, Thailand, Indonesia, India, Taiwan and the Philippines) have seen a foreign net inflow so far for the year with India having the largest.

He said overall investor participation weakened last week as the average daily traded values (ADTV) dropped.

He explained that the biggest weekly decline in ADTV was observed for local institutional funds at 12.4%.