Foreign selling extends to 17th week at slower pace, RM539.2m local equity sold

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KUALA LUMPUR (June 15): Foreign selling of Malaysia equity extended to the 17th consecutive week, but at a slower pace of RM539.2 million from RM1.15 billion the prior week, said MIDF Research.

In his weekly fund flow report today, MIDF Research’s Adam M Rahim said so far in 2020, foreign investors have sold RM15 billion net on Bursa Malaysia.

“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.

“As markets reopened from the long weekend, international investors took out RM250.6 million net of local equities,” he said.

Nevertheless, Adam said foreign funds came into the local market at a tune of RM1.4 million net on Wednesday, snapping the 11-day selling spree on Bursa.

He said the modest entry of foreign funds into Malaysia on Wednesday coincided with the local bourse settling at 1,575.3 points, the highest close since late January 2020.

“Risk-on sentiment was spurred on Wednesday amidst the recovery movement control order taking effect.

“However, the foreign net buying in the local market was short-lived on Thursday as international funds sold RM274.6 million net,” he said.

Adam said investors’ appetite was adversely affected by the Federal Reserve’s indication on keeping interest rates unchanged until 2022 while warning of a long economic recovery from the economic recession.

“The level of foreign net selling dropped substantially to just RM15.5 million on Friday.

“Meanwhile, the overall mood in the market was sombre as investors grew warier of a second wave of Covid-19 infections,” he said.

Moreover, Adam said the US weekly jobless-claims data which showed 1.5 million Americans filing for unemployment insurance in the week before strengthened the Federal Reserve’s cautious commentary earlier on Wednesday.

“In terms of participation, all investor groups recorded a weekly decline in their average daily traded value (ADTV).

“Foreign investors was the group that experienced the smallest weekly decline in their ADTV of 13.2% to reach RM1.50 billion. Despite the drop, the ADTV is still healthy above the RM1.0 billion mark,” he said.