KUALA LUMPUR (March 4): Foreign selling of Malaysian equity rose to RM447.7 million last week from RM319 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 the disposal last week was the largest in nine weeks.
He said the local bourse gained 0.2% on Monday to settle at 1,725 points as US President Donald Trump said he will extend the deadline to raise tariffs on Chinese goods beyond last week as progress was made between the two nations.
"Nonetheless, foreign investors sold RM49.6 million net on Monday as the decline in consumer prices in January for the first time in a decade remained in investors' minds.
"On both Tuesday and Wednesday, the level of foreign net selling tapered to below RM20 million at RM14.7 million," he said.
He said the reduction of foreign net selling occurred despite the geopolitical tension between India and Pakistan.
Adam said foreign net selling then peaked on Thursday at RM211.6 million, the highest in a day so far in 2019 following the failure of the Trump-Kim summit in Hanoi.
He said Friday's foreign net selling was still high at RM157.2 million net as the changes for the MSCI index came into effect, causing foreign funds to rebalance their portfolios in anticipation of the increased weighting of China.
"For the month of February 2019, international investors dumped RM815.6 million net.
"This brings the year-to-date foreign net inflow into Malaysia to RM53.3 million or US$10.4 million.
"In comparison to regional peers, on the regional front, Malaysia remains as the nation with the lowest foreign net inflow amongst the four ASEAN markets we monitor with Indonesia taking the lead with a year-to-date net inflow of US$690.9 million or approximately RM2.8 billion," he said.
Adam said participation amongst the three investor groups remained healthy.
"However, only foreign investors saw a 0.6% increase in terms of average daily traded value (ADTV) last week while local institutions and retail investors experienced a drop more than 4.0% in their ADTV," he said.