This article first appeared in The Edge Financial Daily on April 30, 2019

KUALA LUMPUR: Foreign fund outflows last week fell to its lowest in 16 weeks, with RM72 million net of local equities sold.

MIDF Research pointed out that with two more trading days left, April is set to be a month of foreign net outflow.

“International investors have so far disposed of RM1.21 billion this month, bringing the year-to-date foreign net outflow to RM2.56 billion,” its analyst Adam Mohamed Rahim said in his weekly fund flow report yesterday.

“Malaysia retains its position as the nation with the largest foreign net outflow among the four markets (Malaysia, the Philippines, Thailand and Indonesia) we monitor,” he added.

According to Adam, offshore investors remained as net sellers for the fifth week running last week, albeit at a measurable pace.

“Bursa Malaysia started the week ended April 26 with a foreign net outflow of RM95.2 million on [last] Monday, while the local bourse was little changed at 1,622 points. The foreign net outflow occurred despite gains seen in the KL Construction Index following the reinstatement of the Bandar Malaysia project announced on April 19,” he said.

“On (last) Tuesday, international investors turned net buyers for the first time in nine trading days after purchasing RM38.6 million net before advancing to RM105.9 million net on (last) Wednesday. The surge of foreign funds into Bursa on (last) Wednesday was partly attributable to the overnight record highs posted on Wall Street.

“As such, the FBM KLCI followed suit to close 0.7% higher at 1,638 points,” he noted.

Adam said the two-day buying streak, however, came to an end last Thursday as foreign investors sold RM113.7 million net as US equities slip from their record high.

“[Last] Friday still saw foreign funds selling off equities on Bursa but at a minimal level of RM7.6 million net. Sentiment on (last) Friday was partially buoyed by the agreement of China to purchase more palm oil from Malaysia,” he added.

Meanwhile, among the seven Asian markets that MIDF Research tracks, it said India is the nation with the largest foreign net inflow worth more than US$9.5 billion or RM35 billion as the general election is still ongoing until May.

“Based on the provisional aggregate data for the seven Asian exchanges that we track, investors classified as foreign bought US$370.5 million net last week, and the lowest weekly foreign net inflow so far this year.

“This was [also] the longest weekly buying streak since February to April 2017,” it noted.