This article first appeared in The Edge Financial Daily on March 12, 2019

KUALA LUMPUR: Offshore investors marked their fourth straight week of exiting Malaysia, pulling out RM903.2 million net of local equities — the most in 21 weeks.

MIDF Research said for the first six trading days of March, international investors sold RM1.06 billion net.

Foreign funds have so far disposed of RM849.9 million net year to date.

In his weekly fund flow report yesterday, MIDF Research analyst Adam Mohamed Rahim said on the regional front, Malaysia is now the nation with the highest foreign net outflow among the four Asean markets the research firm monitors.

“Indonesia continues to lead with a year-to-date foreign net inflow of US$817.9 million or above RM3 billion, amid the pre-election hype taking place in the nation,” he said.

Adam noted that foreign net selling occurred on every single day of the week for the week ended March 8 on Bursa Malaysia, stretching the daily selling streak to 12 days and matching the period between July 2 and 17, 2018.

“Foreign net outflow reached RM198.6 million [last] Monday before swelling further to RM263.3 million [last] Tuesday, the largest in a day so far this year.

“Nonetheless, we observe that the massive selldown was in sync with other Asian peers namely South Korea, Indonesia and Taiwan after an overnight sell-off on Wall Street amid an unexpected 0.6% fall in US construction spending for December 2018,” he said.

Adam added that the level of foreign net selling gradually tapered the next two days to reach RM105.2 million last Thursday.

“The shrinkage of foreign selling mainly came from the news of the Chinese government pledging to enact stimulus measures to boost the economy. The local bourse followed suit to marginally gain on those two days.

“However, a heavy sell-off occurred again [last] Friday to a tune of RM193.3 million net. Losses across Asian markets including Malaysia accelerated, following a 20.7% year-on-year slump in China’s exports in February,” said Adam.

“We note that participation among the three investor groups remained healthy. However, only foreign investors saw an 18.4% decrease in terms of average daily trading value last week, while local institutions and retail investors experienced an increase,” he added.

Major equity markets worldwide took a dip last week as downward revision in economic growth forecast by the European Central Bank and weak economic data in China dampened sentiment.

Regionally, an exodus of foreign funds took place in Asian markets last week. Based on the provisional aggregate data for the seven Asian exchanges that MIDF Research tracks, it pointed out that foreign investors dumped US$1.72 billion net last week, wiping off the US$1.24 billion acquired in the week before.