KUALA LUMPUR: Foreign selling on Bursa Malaysia remained heavy last week, taking year-to-date foreign selling to RM6.7 billion after foreign investors sold RM926.1 million, according to MIDF Research.

In his weekly fund flow report yesterday, MIDF head of research Zulkifli Hamzah said for the sixth consecutive week, foreign investors had been net sellers.

He said the amount offloaded was still close to the RM1 billion mark as investors classified as “foreign” sold equities listed on the open market of Bursa (excluding off-market deals) on a net basis amounted to RM926.1 million.

Zulkifli said this was comparable to the RM999.8 billion sold the week before, adding that it was the fourth highest in a week this year.

He said again, foreign investors were net sellers every single trading day last week, and had been selling for the past 14 straight trading days.

Zulkifli said the amount exceeded the RM200 million mark last Tuesday and Thursday, making it 18 days so far this year that the amount had surpassed the threshold.

He said in comparison, daily foreign sale exceeded RM200 million on 23 occasions in 2014.

“However, we note that the intensity of the foreign selldown abated significantly last Friday.

“The amount sold last Friday dropped to only RM73.4 million, the lowest during the 14-day selldown stretch.

“Nevertheless, after the strong US employment numbers released last Friday, the prospect for the foreign selldown to continue to abate is less promising,” he said.

Zulkifli estimated that there is still an overhang of about RM15 billion to RM20 billion of foreign portfolio liquidity on Bursa.

He said last week’s selldown increased the cumulative net foreign outflow in 2015 to RM6.7 billion, almost matching the RM6.9 billion outflow for the entire 2014.

Zulkifli said foreign participation (daily average gross purchase and sale) on Bursa remained elevated at RM1 billion, but it declined 32% from that the week before.

“Local institutions mopped up RM989.7 million last week, but participation rate fell to RM1.99 billion, the first time it dropped below RM2 billion in 11 weeks.

“Consistent with the school holiday season, retailers sold RM63.6 million, with average daily volume falling to its lowest this year at only RM579 million,” he said.

Globally, Zulkifli said sell-offs in the equity markets continued for the second consecutive week.

“Defining the market last week was clearly Greece’s debt impasse.

“The OECD (Organisation for Economic Cooperation and Development) also slashed its 2015 global economic growth forecast significantly to 3.1% from 4%, while the IMF (International Monetary Fund) recommended that the US Federal Reserve delay its rate hike until the first half-year of 2016. The US reported a resurgence in its job market in May,” he added.

This article first appeared in The Edge Financial Daily, on June 9, 2015.