KUALA LUMPUR (Sept 10): Foreign investors' net sale of Malaysian equities amounted to RM278.7 million last week after they bought and sold RM1.85 billion and RM2.13 billion worth shares respectively.
In a note today, MIDF Amanah Investment Bank Bhd analyst Adam M. Rahim said that while last week was the eighth straight week of foreign net selling across Bursa Malaysia, the pace of such selling has been gradually declining for the past four weeks.
"On a year-to-date basis, international funds have taken out RM7.62 billion net worth of local equities from Bursa. This makes up 65% of last year's total foreign net outflow of RM11.69 billion.
"In terms of participation, foreign investors experienced the largest weekly drop of 27.2% in the average daily traded value to reach below the RM1.0 billion mark at RM996.0 million," Adam said.
He said that on Tuesday, Bursa Malaysia reopened on a sluggish note following the long weekend as international funds' net sale of Malaysian equities amounted to RM122.8 million.
General sentiment remained cautious after the US increased tariffs on Chinese goods by 15% on Sunday (Sept 1), according to him.
"Moreover, the risk-off mood was exacerbated by the struggle between Beijing and Washington to set a date to continue trade talks, dragging the local bourse 1.3% lower to close at 1,591 points on the same day. It was notable that the heavy foreign net outflow was in conformity with other markets we monitor, namely South Korea, Thailand and Taiwan.
"The momentum of foreign net selling activity took a breather on Wednesday to go below the RM100 million mark to reach RM78.0 million. The moderation in foreign net outflows was sparked by (i) Hong Kong's plans to formally withdraw the extradition law; and (ii) the likelihood of a hard Brexit being avoided. The FBM KLCI followed suit to advance the most during the week by 0.5% on the same day to settle at 1,599.9 points," he said.
Thursday saw international funds making a net purchase of RM2.75 million worth of local stocks, buoyed by news that US-China trade talks would resume in early October, according to Adam.
"The foreign net inflow was however short-lived as foreign funds disposed of RM80.6 million net on Friday despite strong US jobs data," he said.