Foreign selling continued at slower pace of RM270m last week — MIDF Research

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KUALA LUMPUR (July 13): Foreign selling of local equities on Bursa Malaysia slowed down to RM270 million last week, from RM339.4 million the prior week, said MIDF Research.

In its weekly fund flow report today, MIDF said that was the 21st consecutive week of foreign net selling.

“So far in 2020, foreign investors have sold RM16.9 billion net on Bursa.
 
“In comparison with the other six Asian markets we track, Malaysia still has the fourth smallest foreign net outflow on a year-to-date basis,” it said.

MIDF said as markets reopened on Monday last week, international investors acquired RM79.9 million net of local equities, snapping the 13th consecutive days of foreign net outflow.

However, it said this quickly reversed the following day on Tuesday which recorded the highest foreign net outflow last week amounting to RM289.6 million, possibly due to fear of a global surge in Covid-19 cases dampening hope of a faster economic recovery.

“Note that the highest foreign net inflow occurred on Wednesday last week at a tune of RM229.1 million, following the OPR (overnight policy rate) cut by 25 basis points to a record low of 1.75% which could possibly help to prop up the pace of economic recovery amid the Covid-19 pandemic.

“However, the accumulation phase by foreign investors was short-lived as they turned net sellers of local equities for the next two days,” it said.

MIDF said the foreign net selling last Thursday and Friday was probably caused by the negative news flow of surging Covid-19 infections globally and a decline in distributive trade and the Industrial Production Index (IPI) in May 2020 on a year-on-year basis as reported in Malaysia last week.

“In comparison to another three Southeast Asian markets that we tracked last week, Malaysia recorded the second highest foreign net outflow, followed by Indonesia, while the Philippines posted the highest net outflow.

“Thailand was the only market that registered a foreign net inflow,” it said.

MIDF said in terms of participation, retail and institutional groups recorded a weekly increase in their average daily trading value (ADTV) by 37.6% and 34.2% respectively, while foreign investors experienced a weekly increase in their ADTV by 29.1% to reach RM1.3 billion, which was above the healthy level of RM1 billion.