Foreign selling narrowed to RM892.4m last week, says MIDF Research

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KUALA LUMPUR (May 28): Foreign selling of Malaysian equity on Bursa Malaysia narrowed to RM892.4 million last week, from RM2.48 billion the prior week, according to MIDF Investment Bank Bhd Research.

In his weekly fund flow report today, MIDF Research’s Adam M Rahim said foreign investors were net sellers on every single day of the week, stretching the selling spree to 15 straight days as of last Friday.

He said this is the longest selling streak recorded since the 17 day binge in August 2017.

“Monday saw international investors taking RM125.4 million net off the table. Global investors then sold off RM77.2 million net the next day as investors digested poor quarterly results of KLCI linked companies such as Telekom Malaysia.

“The momentum of foreign selling ramped up to RM286.8 million net on Wednesday, coinciding with FBM KLCI’s 2.21% daily drop, the largest since Aug 24, 2015,” he said.

Adam said the selloff was mainly sparked by looming concerns on the nation’s debt level.

“Other factors included the geopolitical tensions between Washington and Pyongyang which also led to a heavy selloff in Asian peers namely Thailand, Taiwan and the Philippines.

“Thursday then saw a higher level of foreign selling at RM322.8 million net which dragged the FBM KLCI to the lowest close since late December 2017 of 1,776 points,” he said.

Nonetheless, Adam said foreign selling shrank to as low as RM80 million net on Friday with the FBM KLCI snapping four straight sessions of losses as it settled above 1,800 points.

He said last week’s foreign withdrawal has wiped out the cumulative inflows which stood at RM40.2 million in the week before.

“The year-to-date outflow from Malaysia is RM852.2 million net, which is still the lowest among the ASEAN peers that we track.

“Foreign participation dipped as the foreign average daily trade value(ADTV) declined by 35% but is still considered healthy at RM1.56 billion,” he said.