Foreign selling slowed down to RM486m last week, says MIDF Research fund

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KUALA LUMPUR (April 6): Foreign selling of local equities on Bursa Malaysia slowed down last week to RM486 million, from RM631.9 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 in comparison to the other six Asian peers that the research firm monitors, Malaysia remains as the nation with the third smallest foreign net outflow on a year-to-date basis.

“The year-to-date foreign outflow from Malaysia came to RM8.12 billion.

“Monday recorded a foreign net outflow of RM108.5 million in tandem with the FBM KLCI’s 1.1% drop and the descent of Brent crude oil price to its lowest point in 18 years,” he said.

Adam said tables were turned on Tuesday as offshore investors mopped up RM113.4 million net of local equities, snapping the 28-day foreign net selling streak.

“The local bourse followed suit [to] gain by 1.7% to close at 1,350.9 points, the highest close in more than two weeks.

“Risk-on appetite was mainly boosted by the expansion in China’s manufacturing activity in March 2020,” he said.

However, Adam said the foreign net inflow was shortlived as foreign investors dumped RM253.4 million on Wednesday, the highest foreign net outflow during the week. Investors’ nerves were frayed as Asian manufacturing activity data including Malaysia showed a slowdown last month.

“The momentum of foreign net selling decelerated to RM96.8 million net on Thursday following President Trump’s expectation that Saudi Arabia and Russia to announce a deal on an oil production cut.

“As such, Brent crude oil price jumped by 28.0% on Thursday to US$29.9 per barrel, the largest daily gain in history,” he said.

Adam said Friday then saw a foreign net outflow of RM140.7 million as FTSE Russell kept Malaysia on the watchlist for bond index exclusion.

Meanwhile, he said Malaysia’s exports grew by almost 12% in February 2020, the strongest in 16 months.

“In terms of participation, the average daily traded value (ADTV) of foreign investors increased the most by 5.5% to RM1.27 billion, which is still at a healthy level,” he said.

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