Thursday 28 Mar 2024
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KUALA LUMPUR (Aug 19): Sale by foreign funds of Malaysian equity slowed to RM598.1 million last week, from RM1.04 billion the prior week, according to MIDF Amanah Investment Bank Bhd Research.

In his weekly fund flow report today, MIDF Research's Adam M Rahim said as the local market reopened on Tuesday from the Hari Raya Aidil Adha holiday, foreign investors took out RM209.6 million net of local equities amidst geopolitical turbulence from Argentina and Hong Kong.

He said this was the highest foreign net outflow seen during the week, pulling the local bourse below 1,600 points to settle at 1,592.88 points on the same day, the lowest close since late August 2015.

"Levels of foreign net selling receded later on Wednesday to RM73.7 million as President Trump delayed some tariffs on Chinese goods, spurring a relief rally around the world.

"Chinese officials also planned to proceed with plans to have face-to-face trade meeting with Washington in September, signalling that trade talks remain despite the last escalation of tariff threats by the US," he said.

Adam said the pace of foreign net selling, however, swelled to RM196.8 million net on Thursday due to concerns that the US economy may slip into a recession following the inversion of the US treasury yield curve.

He said foreign net selling activity later slowed down to RM118.1 million on Friday amidst Malaysia's 2Q19 GDP growth of 4.9% year-on-year, beating market expectations.

"On a month-to-date basis, August has seen a foreign net outflow of RM1.9 billion.

"This brings the year-to-date foreign net outflow from Malaysia to stand at RM6.64 billion, making up around 57% of last year's total foreign net outflow," he said.

Adam said in terms of participation, foreign investors experienced a weekly drop of 11.9% in the average daily traded value (ADTV) to reach RM982.2 million.

Nevertheless, he said this was the smallest drop amongst other investor groups: the retail market and local institutional funds which saw a weekly drop in their ADTV of more than 15%.

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