KUALA LUMPUR (Nov 23): Foreign selling of local equities on Bursa Malaysia rose to RM268.9 million from RM246.3 million the prior week.

In a note today, Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said Bursa started the week on the wrong foot as offshore investors sold RM126.4 million net of local equities on Monday.

He said the positive vibes which came from the signing of the Regional Comprehensive Economic Partnership (RCEP) by Malaysia and 14 other countries were somewhat outweighed by the sell-off in rubber glove counters amid the thematic play focusing on the expected economic recovery.

Adam said the level of foreign net selling inched higher to RM143.7 million on Tuesday as investors continued to reduce exposure in rubber glove counters.

He said the sell-off in rubber glove counters was exacerbated by news that Moderna Inc’s experimental Covid-19 vaccine was 94.5% effective in a preliminary analysis of a late-stage clinical trial.

“Notwithstanding this, euphoria spread across other sectors, pushing the FBM KLCI 0.7% higher to close above 1,600 points for the first time since the end of July this year.

“Offshore funds later snapped up RM169.6 million net of local equities on Wednesday as the majority of investors chose to focus more on positive vaccine news rather than rising virus infections,” he said.

Adam said Pfizer Inc mentioned that a key safety milestone had been reached in the study of its Covid-19 vaccine, and the drugmaker is now preparing to seek an emergency-use authorization from US regulators.

He said the local bourse too remained above 1,600 for the second day.

“The foreign net inflow was however short-lived as international investors sold RM170.5 million net of local equities on Thursday.

“Virus cases surged globally and authorities signalled measures to curb gains after the recent spike in cases.

“For instance, the central bank of Indonesia cut its policy rate for the first time in four months while the Philippines central bank unexpectedly reduced its key interest rate after the nation’s economy contracted more than expected in the third quarter of the year,” he said.

Adam said Friday then saw international funds slowly acquiring local equities at a tune of RM2.1 million net which pushed the local bourse higher by 0.6% to close at 1,593.8 points.

He said buying interest for rubber glove counters re-emerged after the counter saw a sell-off during the week amid the Covid-19 optimism.

“Among the 30 FBM KLCI index constituents, Top Glove Corp Bhd dominated gainers with a 5.0% advance which boosted the Bursa Healthcare Index by more than 1.0%.

“On a year-to-date basis, foreign investors have taken out RM23.37 billion net of local equities in 2020,” he said.

Adam said in terms of participation for foreign investors, the average daily traded value from Monday to Friday remained robust at RM1.62 billion.

“Among Malaysia’s ASEAN peers, Malaysia is the nation with the second largest year-to-date foreign outflow after Thailand,” he said.