This article first appeared in The Edge Financial Daily on July 24, 2018

KUALA LUMPUR: The pace of selling on Bursa Malaysia by international investors has decelerated for the past four consecutive weeks, said MIDF Research.

According to its analyst Adam M Rahim, the amount sold by global funds last week fell by more than half from RM531.8 million net to RM247.1 million net based on preliminary data from Bursa, which excluded off-market deals.

“This is the smallest weekly attrition recorded so far in 2018,” he said in his weekly fund flow report yesterday.

Adam noted that global investors were net sellers on every single day last week except Wednesday, which saw a foreign inflow worth RM71.7 million net, the first since June 29.

“The local bourse followed suit to end 0.91% higher at 1,753 points [last Wednesday] amid [US Federal Reserve chairman] Jerome Powell’s reaffirmation of his upbeat assessment of the US economy. Other Asian peers, namely South Korea, Taiwan and the Philippines, also experienced a surge of inflows on the same day,” he said.

“On the other hand, foreign net selling that occurred on other days remained well below RM100 million, a level deemed moderate. [Last] Thursday recorded the highest foreign net selling during the week at RM95.6 milion net.

“Notwithstanding this, the FBM KLCI marked its nine-day winning streak on the same day supported by a rise in construction stocks following the announcement that the Kuala Lumpur-Singapore high-speed rail project will be deferred instead of being unilaterally cancelled,” he added.

However, the reduction in outflows to RM64.6 million net last Friday coincided with the 0.26% decline in the FBM KLCI amid profit-taking activity in telecommunications stocks as they led decliners.

Adam said year to date (YTD), Malaysia’s foreign net outflow has reached RM8.31 billion, offsetting 80% of last year’s RM10.33 billion inflow.

“Nevertheless, this figure is still the second-lowest outflow among the four Asean markets we track, standing below the Philippines which has a YTD outflow of US$1.31 billion (RM5.32 billion) net,” he noted.

Meanwhile, participation among foreign investors, retailers and local institutional funds remained upbeat last week as each of their average daily trading values stood above RM1 billion, RM800 million and RM2 billion respectively.