KUALA LUMPUR (Aug 13): Foreign selling of Malaysian equity on Bursa Malaysia swelled to RM1.04 billion last week, from RM601.2 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 this was the largest weekly foreign net outflow in 12 weeks.
"Foreign net selling intensified on Monday as foreign investors offloaded RM357 million, the largest in a day since early May this year.
"Sentiment was partially dampened by China's retaliation towards President Trump's latest tariff threat by letting the yuan tumble to the weakest level in more than a decade.
"It is notable that the heavy foreign net outflow on Monday was in conformity with other regional peers under our coverage," he said.
Adam said the pace of foreign net selling slowed down a little to RM219.9 million net on Tuesday.
"China's move to limit the depreciation of the yuan restored calm in investors' nerves.
"The level of foreign net outflow heightened to RM269.5 million following a batch of surprise interest rate cuts by central banks across the Asia Pacific (New Zealand, Thailand and India) to counter the risks in the global economy," he said.
Adam said optimism returned to the markets on Thursday as foreign net selling substantially dropped to RM30.7 million amidst the green light granted by Japan to allow exports of semiconductor manufacturing material to South Korea.
Nevertheless, he said such positive vibes diminished the next day as foreign funds dumped RM158.1 million as the US puts the decision for US companies to restart business with Huawei Technologies Co on hold as China halts crop buying from the US.
"Last week's massive net outflow brings the year-to-date foreign net outflow from Malaysia to stand at RM6.01 billion.
"This makes up around 51.0% of last year's total foreign net outflow," he said.
In terms of participation, Adam said foreign investors experienced an 18.5% weekly drop in the average daily traded value (ADTV) but still remained healthy at above the RM1 billion level.
Meanwhile, he said the retail market and institutional funds recorded a weekly increase in ADTV of above 5%.