Foreign investors turned sellers last week, offloaded RM301.3m, says MIDF Research

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KUALA LUMPUR (April 2): Foreign investors turned sellers last week and offloaded some RM301.3 million of Malaysian equity from buying RM447.1 million the prior week, according to MIDF Amanah Investment Bank Bhd.

In his weekly fund flow report today, MIDF Research's Adam M Rahim said foreign net selling occurred on three out of five trading days last week, from Monday to Wednesday.

"Only RM40.3 million net of local equities were sold on Monday but selling activity gradually accelerated to RM207.7 million net on Wednesday, coinciding with the FBM KLCI's largest daily loss during the week of 0.25%.

"The main trigger for the heavy selling on Wednesday is the selloff in technology stocks on Wall Street overnight, sparked by increased scrutiny over the technology sector whereby Chinese investments in the sector would be capped at a certain level," he said.

Adam said global investors slowly returned to Malaysia on Thursday to a tune of RM39.2 million net aided by easing geopolitical tensions in the Korean peninsula after the two Koreas are set to have talks on April 27.

He said Friday's foreign buying on Bursa Malaysia declined to RM9.3 million net with regional peers, namely the Philippines and Indonesia, closed for Good Friday.

Adam said March 2018 recorded a net outflow of RM61.6 million net, a big difference from the RM1.12 billion sold in the previous month.

Meanwhile, he said RM2.2 billion net of local equities were acquired by foreigners on Bursa in 1Q18, the only Southeast Asian market under his coverage with a net inflow.

"Still, this is less than the RM5.74 billion accumulated in 1Q17.

"We reckon that foreign flows may be muted leading up to the 14th General Election which looks set to be held within the next few months," he said.

Adam said foreign participation has started to slow down a bit as the foreign average daily trade value (ADTV) declined below the RM1 billion mark for the first time in 12 weeks to settle at RM934 million.

He said the retail market meanwhile was little changed with an ADTV of RM842 million.