KUALA LUMPUR (May 4): Foreign selling of Malaysian equity decelerated to RM87.9 million last week, from a whopping RM1.13 billion the prior week, according to MIDF Research.

In his weekly fund flow report today, MIDF Research’s Adam M Rahim said this was the lowest in 11 weeks.

“For the month of April 2020, offshore investors took out RM2.67 billion net of local equities, more than half of what was sold in the preceding month.

“In comparison to its other six Asian peers that we monitor, Malaysia remains as the nation with the third smallest foreign net outflow on a year-to-date basis after Indonesia and the Philippines,” he said.

Adam said the year-to-date foreign outflow from Malaysia came to RM10.3 billion.

He said Bursa began the week on a gloomy note as foreign investors pulled out RM115.8 million net of local equities.

“This was despite the announcement of more stimulus measures by the Bank of Japan which includes the additional purchase of commercial papers and corporate bonds.

“Foreign net selling activity dipped on Tuesday to RM95.4 million as investors acknowledged progress in the global fight against the coronavirus but remained cautious amidst a painful earnings period,” he said.

Adam said Wednesday then saw a massive drop in foreign net outflow to RM800,000.

He said most Asia-Pacific stocks gained Wednesday on cautiously positive sentiment that steps by governments around the globe to ease lockdowns will not set off a new deadly round of the respiratory illness.

“Tables were turned on Thursday, the last trading day of April, as foreign investors scooped up RM124.5 million net of local equities.

“The local bourse followed suit to gain 2.0% higher, settling above 1,400 points As such, the 11-day selling streak on Bursa was snapped,” he said.

Adam said risk-on sentiment was sparked by the effectiveness of a drug by Gilead Sciences against the Covid-19 pandemic.

“In terms of participation, foreign investors saw a 9.4% weekly decline in its average daily traded value (ADTV), the largest amongst other investor groups.

“Nevertheless, the absolute ADTV of foreign investors remained healthy above the RM1 billion mark,” he said.