KUALA LUMPUR (July 20): Foreign selling of local equities on Bursa Malaysia surged to RM905.9 million last week versus RM270 million in the preceding week, said MIDF Research.

In its weekly fund flow report, MIDF Research said it was the 22nd consecutive week of foreign net selling.

“So far in 2020, foreign investors have sold RM17.8 billion net on Bursa.

“In comparison with the other six Asian markets we track, Malaysia still has the fourth smallest foreign net outflow on a year-to-date basis,” it said.

It said Bursa bucked the trend with the foreign net outflow occuring every day last week.

“As markets reopened on Monday last week, foreign investors disposed of RM77.1 million net of local equities, which was the lowest foreign net outflow in the week.

“On Tuesday, the foreign net outflow increased to RM220.2 million, which coincided with the announcement of Malaysia’s unemployment rate increase to 5.3% in May 2020 from 5% in April 2020, reflecting the economic fallout from the movement control order (MCO),” it said.

MIDF Research said the foreign net outflow subsided last Wednesday and Thursday at a tune of RM207.3 million and RM132.5 million respectively due to news of positive progress for a Covid-19 vaccine.

“Nonetheless, foreign investors remained in risk-off mode amid surging coronavirus cases globally, a deteriorating US-China relationship and weaker-than-expected retail sales in China, as well as detention orders on Top Glove Corp Bhd’s shipments by the US customs authority.

“As Bursa reopened on Friday following a trading halt, it experienced the highest foreign net outflow [of the week] at a tune of RM268.7 million,” it said.

Nonetheless, the research house said the FBM KLCI posted its highest one-day gain since June 3, 2020 of about 2% to 1,596.3 points on the same day, possibly boosted by a strong rebound in glove counters.

“In comparison with another three Asean peers that we tracked last week, Malaysia recorded the highest foreign net outflow, while Thailand experienced the least foreign net outflow.

“In terms of participation, retail and institutional groups recorded a weekly increase in their average daily trading value (ADTV) by 21.7% and 18.2% respectively, while foreign investors experienced the least weekly increase in their ADTV by 6.3% to reach RM1.4 billion, which was above the healthy level of RM1 billion,” it said.