KUALA LUMPUR (Oct 14): Foreign selling of Malaysian equity on Bursa Malaysia narrowed to RM276.6 million last week, from RM770.8 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 Bursa had a slightly rough start to the week as foreign investors disposed of RM65.5 million net on Monday.

He said sentiment was dampened as Chinese officials appeared to be reluctant to agree to a broad trade deal with the US ahead of negotiations on Thursday.

"The level of foreign net selling on Tuesday and Wednesday almost doubled to reach RM113.5 million net and RM112.7 million net.

"The tensions between the US and China grew further as President [Donald] Trump blacklisted eight Chinese technology giants, citing the companies' involvement in China's crackdown on Muslim minorities in Xinjiang," he said.

Nevertheless, Adam said the momentum of foreign net outflows slowed down on Thursday as international funds only sold RM40.6 million net of local equities.

He said the decline in the level of foreign net selling was fuelled by the possibility that the US and China may reach a partial trade deal.

"Foreign investors then took a breather from selling activities as they snapped up RM55.6 million net of local equities, lifting the local bourse up by 0.3% to settle at 1,556.8 points.

"This is the first foreign net inflow in 11 trading days," he said.

Adam said besides Trump's comments that the first day of high-level trade negotiations went very well, optimism stemmed from the tabling of Malaysia's Budget 2020 in parliament.

"On a year-to-date basis, international funds have taken out RM8.88 billion worth of local equities from Bursa, making up 76.0% of last year's foreign outflow of RM11.69 billion.

"In terms of participation, foreign investors was the only group that experienced a weekly drop in the average daily traded value (ADTV) of 6.0% to remain below the RM1.0 billion mark for the third week running," he said.