Foreign funds snap eight-week selling streak — MIDF Research

This article first appeared in The Edge Financial Daily, on September 18, 2019.
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KUALA LUMPUR: Foreign funds snapped their eight-week selling streak on Bursa Malaysia, buying RM192.1 million worth of Malaysian equities last week, compared to dumping RM278.7 million in the prior week, according to MIDF Amanah Investment Bank Bhd Research.

In his weekly fund flow report yesterday, MIDF Research’s Adam M Rahim said Bursa started the week solidly after a three-day holiday weekend as international funds flocked to the Malaysian market, buying RM197.3 million net last Tuesday.

He said this was the highest foreign net inflow in a day since early June 2019, cheered by a rally on Wall Street amid signs of progress concerning trade talks between the US and China.

“Foreign investors continued to snap up local equities last Wednesday but at a slower pace of RM99.7 million net.

“This was in conformity with other markets under our coverage such as Thailand, Indonesia, the Philippines, India and Taiwan,” he said.

Adam said optimism was stoked by China’s move to exempt 16 types of products from the US from additional retaliatory tariffs effective yesterday with a one-year validity period.

Nevertheless, he said offshore investors took a breather last Thursday, disposing of RM49.9 million net of local equities.

“US President Donald Trump’s postponement of a 5% extra tariffs on Chinese goods by two weeks was overshadowed by Bank Negara Malaysia’s decision to keep the overnight policy rate unchanged at 3%.

“Foreign net selling continued last Friday at a slightly faster pace of RM55 million despite the European Central Bank’s aggressive move to cut interest rates further below zero.”

Adam said for September, international investors have thus far sold RM86.5 million net, the lowest among the seven Asian markets that MIDF Research monitors.

“Year to date, international funds have taken out RM7.43 billion worth of local equities from Bursa.

“In terms of participation, foreign investors experienced the largest weekly gain of 15.6% in the average daily traded value, breaching the RM1 billion mark at RM1.15 billion.”