Foreign funds sold RM162.1m local equity last week, says MIDF Research

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KUALA LUMPUR (April 1): Foreign funds sold RM162.1 million net of local equities last week, compared to an inflow of RM86.3 million the prior week, according to MIDF Amanah Invesment Bank Bhd Research.

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

"Offshore investors sold RM34.8 million net on Monday, coinciding with the 1.1% decline in the FBM KLCI as investors shifted to safer assets amidst concerns of a US recession.

"Nonetheless, it was notable that other Asian peers such as Taiwan and South Korea recorded larger foreign net outflows of more than US$90 million and steeper declines in their respective bourses," he said.

Adam said international funds slowly entered into Bursa Malaysia to a tune of RM23.9 million on Tuesday, the highest in six trading days, lifting the local bourse slightly by 0.1% to close at 1,650 points.

He said foreign net buying was also prevalent in the other six Asian markets the research firm monitors following the possibility of major central banks easing to mitigate the impact of a slowdown in global economic growth.

"Wednesday and Thursday saw foreign investors returning to selling mode, disposing more than RM60 million net on both days.

"Sentiment was rather muted on those days mainly due to the 14% year-on-year drop in profits of China's major industrial firm in January and February this year, signalling a softening economic growth of the nation," he said.

Adam said the level of foreign net selling declined to RM15.6 million on Friday as the latest round of US-China trade discussions resumed.

As such, he said there was an influx of foreign funds into China stocks which reached the largest in a day in almost four months.

"For the month of March, foreign investors took out RM1.56 billion from Bursa, bringing the foreign net outflow for 1QCY19 to RM1.35 billion.

"In contrast, 1QCY18 recorded a foreign net inflow of RM2.2 billion ahead of Malaysia's 14th general election last year," he said.

Adam said amongst the four ASEAN markets MIDF Research monitors, Malaysia is still the nation with the second largest foreign net outflow after Thailand, which recorded a foreign net outflow of US$407.3 million, or higher than RM1.6 billion, in 1QCY19.