This article first appeared in The Edge Financial Daily on April 14, 2020

KUALA LUMPUR: Offshore investors' net selling of Bursa Malaysia securities further decelerated last week, with RM326 million net sold compared with RM486 million disposed of in the preceding week, according to MIDF Amanah Investment Bank Bhd.

This brings Malaysia's year-to-date (YTD) foreign outflow to RM8.45 billion. Malaysia is still having the third-smallest foreign net outflow YTD, compared to six other Asian peers that the research house monitors, said MIDF’s Adam M Rahim in his weekly fund flow report.

“International funds sold RM66.5 million net last Monday, a level deemed contained as new cases of Covid-19 appeared to slow in the US and Europe, including France and Italy.

“Foreign investors returned modestly to Bursa last Tuesday by snapping up RM2.4 million net of local equities as investors digested the additional RM10 billion assistance package targeted at SMEs (small and medium enterprises),” he said.

Last Tuesday's foreign net buying lifted the local bourse by 2.1% to a three-week high of 1,369.9 points.

However, foreign net selling peaked during the week on Wednesday at RM136.9 million as caution drove sentiments after the daily Covid-19 death tolls in the US and UK reached their highest levels.

“Foreign net selling shrank to RM36.3 million last Thursday, the lowest in a day since mid-February this year. Optimism last Thursday was driven by hopes that the outcome of the meeting between Opec members and its allies will help support crude oil prices.

“Last Friday, the foreign net outflow was RM88.7 million, coinciding with the announcement of the movement control order being extended to April 28.”

Adam said the risk-off sentiment was also sparked by the smaller-than-expected quantum of oil output cuts agreed by Opec and its allies.

Meanwhile, the foreign net selling streak in Asian markets reached its ninth week, though at a reduced pace of US$1.04 billion last week, from US$4.15 billion the week before.

Based on the provisional aggregate data for seven Asian

exchanges that MIDF tracks, this is the lowest weekly foreign net outflow in eight weeks, said Adam.