Foreign selling narrowed to RM289.3m last week, says MIDF Research

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KUALA LUMPUR (April 15): Sale of Malaysian equities by foreign funds narrowed to RM289.3 million last week from RM416.7 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 international funds have been net sellers on Bursa Malaysia for nine out of fifteen weeks.

He said international funds started the week with a decent foreign net outflow of RM12 million on Monday, the lowest in 11 trading days.

"The level of foreign net selling jumped by more than four times on Tuesday to reach RM53.1 million as Bursa's telecommunication index led decliners amongst the sectorial indices.

"Investors shrugged off the cut in the International Monetary Fund's economic growth outlook for 2019 from 3.5% to 3.3%," he said.

Adam said as such, offshore investors made their way back to Malaysian shores on Wednesday to a tune of RM67.6 million net, a level not seen in 17 trading days.

He said the next two days saw the resumption of foreign net selling on Bursa but at a higher pace of above RM100 million.

Adam said Thursday recorded the highest foreign net outflow during the week at RM165.4 million due to the report of Khazanah Nasional Bhd offering to sell Tenaga Nasional Bhd (TNB) shares under a share placement to raise RM1.05 billion, causing the share price of TNB to drop by 4.1%.

He said the FBM KLCI closed at the 1,624 points, the lowest close since late December 2016.

"The announcement of the continuation of the ECRL project at a lower cost on Friday helped to reduce foreign net selling level to RM126.4 million.

"The local bourse reacted positively to the announcement by gaining for the first time in three days to settle at 1,630 points on Friday," he said.

Adam said on a year-to-date basis, foreign funds have sold RM2.05 billion net of local equities.

He said amongst the four ASEAN markets MIDF Research monitors, Malaysia retains its position as the nation with the largest foreign net outflow.

"Meanwhile, amongst the seven Asian markets we track, India is the nation with the largest foreign net inflow worth more than US$8.5 billion or RM30 billion as the general election held in phases had [begun] in the republic," he said.