Foreign selling of local equity widened to RM624.7m last week — MIDF Research

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KUALA LUMPUR (June 29): Foreign investors offloaded Malaysian equity to the tune of RM624.7 million last week, from RM600.8 million the prior week.

In his weekly fund flow report today, MIDF Research's Khoo Zhen Ye said that so far in 2020, foreign investors have sold RM16.4 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.

"As markets reopened on Monday last week, international investors took out RM133.8 million net of local equities, which was a similar trend for all Southeast Asian markets on fear of a resurgence of Covid-19 outbreak that could drag the economic recovery for a longer period," he said.

Nonetheless, Khoo said the local bourse managed to close slightly higher by about 0.3% to 1,511.2 points on the same day.

"Note that the foreign net outflow occurred on every day last week.

"The foreign net selling continued to increase the next day on Tuesday at a tune of RM146.9 million before starting to subside on Wednesday and Thursday with the lowest foreign net outflow of the week [recorded] on Thursday at a tune of RM74.7 million," he said.

Nonetheless, he said foreign net selling activity rose to RM159.7 million last Friday, which was also the highest foreign net outflow recorded last week.

Khoo said investors' appetite was negatively affected by the downgrading of Malaysia's economic growth by the World Bank to -3.1% from -0.1% for 2020 announced last Thursday.

"The KLCI Index closed lower by about 1.3% to 1,488.1 points last week.

"In comparison with another three Southeast Asian markets that we track, Malaysia recorded the second lowest foreign net outflow and the Philippines had the lowest foreign net outflow last week," he said.

Khoo said while Thailand and Indonesia posted relatively higher foreign net outflows, foreign investors seemed to ease their selling last week compared with the preceding week.

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

"Foreign investors experienced the largest weekly decline in their ADTV by 45.5% to reach RM880.4 million, which was below the healthy level of RM1 billion," he said.