Foreign selling of Malaysian equities narrowed to RM339.4m last week, says MIDF Research

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KUALA LUMPUR (July 6): Foreign selling of Malaysian equities more than halved last week to RM339.4 million from RM624.7 million in the preceding week, according to MIDF Research.

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

“So far in 2020, foreign investors have sold RM16.7 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 as markets reopened on Monday last week, international investors took out RM12.7 million net of local equities, which was a trend similar to all Southeast Asian markets on fear of a global surge in Covid-19 cases over the weekend, dampening hope of a faster economic recovery.

It noted that the foreign net outflow occurred every day last week, with Wednesday recording the highest foreign net outflow at a tune of RM142.1 million, which coincided with a decline in Malaysia’s Producer Price Index (PPI) in May for the third consecutive month.

“However, the foreign net outflow started to subside on Thursday and Friday, with the lowest foreign net outflow of the week on Friday at a tune RM8.4 million.

“The lower foreign net selling on Thursday and Friday was probably due to the positive news flow of a sharp rebound of the local manufacturing sector with a Purchasing Managers’ Index (PMI) score of 51.0 in June, and optimistic economic data from the US and China,” it said.

MIDF Research said as a result, the FBM KLCI closed higher by about 4.3% at 1,552.6 points last week.

“In comparison to another three Southeast Asian markets that we track, Malaysia recorded the lowest foreign net outflow, followed by Indonesia and Thailand last week.

“The Philippines was the only market that registered a foreign net inflow.

“In terms of participation, retail and institutional groups recorded a weekly increase in their average daily traded value (ADTV) by double digits of 38.7% and 36.7% respectively, while foreign investors experienced the smallest weekly increase in their ADTV by 3.1% to reach RM907.3 million, which was below the healthy level of RM1 billion,” it said.