Foreign selling narrowed to RM127.6m last week, says MIDF Research

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KUALA LUMPUR (Dec 31): Foreign selling of Malaysian equity on Bursa Malaysia narrowed to RM127.6 million last week from RM464.2 million 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 Monday's foreign net selling declined to RM13 million on the eve of Christmas compared to the previous three trading days which saw foreign net outflow standing above RM100 million.

He said the slowdown in foreign net selling was partly attributable Beijing's pledge to support the economy in the wake of the global trade tribulation by slashing taxes and ensuring liquidity is maintained.

"Foreign funds later pulled out RM60.6 million on Boxing Day, taking cue of the unnerving political turmoil in the US where President Trump became hostile towards the [Federal Reserve] chairman.

"This is in conformity with the three other ASEAN peers we monitor. Nonetheless, the level of foreign net selling on Thursday retreated to a lower amount of RM28.1 million amidst the overnight jump in Wall Street following a report that US holiday sales hit a six-year high," he said.

Adam said Friday's pace of foreign net selling was little changed at RM26 million net as the euphoria on the US's consumer strength evaporated with no catalyst in sight.

"With one more trading day left before 2018 ends, Malaysia has seen a total foreign net outflow of RM11.65 billion or US$2.88 billion.

"As such, Malaysia is set to record its largest yearly foreign net outflow since 2015 which saw RM19.49 billion of equities being pulled out," he said.

Adam said while this amount offsets last year's foreign net inflow of RM10.33 billion, Malaysia is still the nation with the second lowest year-to-date outflow among the four ASEAN markets he monitors.

He said the participation rate among the various group of investors saw a decline across the board.

"The average daily traded value (ADTV) of foreign investors registered the largest weekly drop of 58.7% after declining below RM1 billion to RM475 million.

"We note that the weekly ADTV for foreigners was also the lowest in the last week of 2017," he said.