KUALA LUMPUR (July 27): Foreign selling of local equities on Bursa Malaysia rose to RM910.2 million last week, from RM905.9 million the prior week, said MIDF Research.

In its weekly fund flow report today, MIDF Research said this was the 23rd consecutive week of foreign net selling.

“So far in 2020, foreign investors have sold RM18.8 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 Research said Bursa bucked regional trends as it experienced foreign net outflow on every day of last week.

It said as markets reopened on Monday last week, foreign investors disposed of RM110.7 million net of local equities.

“On Tuesday, the foreign net outflow increased to RM295.8 million following the announcement by the government that movement control order (MCO) could be reimposed as the sporadic Covid-19 cases started to creep up.

“Note that the foreign net inflow subsided on Wednesday and Thursday last week at a tune of RM137.3 million and RM23.4 million respectively potentially due to the Malaysia’s Leading Index (LI) [growing] 0.6% year-on-year (y-o-y) in May 2020 from a decline of 5.7% y-o-y in April 2020 on Thursday last week,” it said.

MIDF Research said this was also the first growth since February 2020, signalling a rebound in the economy since the MCO began.

“However, foreign investors remained in risk-off mode as US-China ties deteriorated further when the US asked China to close its Houston Consulate in 72 hours on Tuesday last week.

“On Friday, Bursa experienced the highest foreign net outflow at a tune of RM342.8 million on mounting geopolitical headwinds as China retaliated by ordering the US to close its consulate in Chengdu, adding greater uncertainty over the Sino-US tensions which might have negative ramifications in the region,” it said.

“In comparison to another three Southeast Asian markets that we tracked last week, Malaysia recorded the highest foreign net outflow while Philippines experienced the least foreign net outflow,” it said.

MIDF Research said in terms of participation, the foreign investors experienced a weekly increase in average daily traded value by 0.1% to reach RM1.4 billion which was above the healthy level of RM1.0 billion.