KUALA LUMPUR: Just as foreign outflow appeared to be receding, heavy selling resumed last week, pushing net foreign outflow for the first half of 2015 to RM8.7 billion, exceeding the RM6.9 billion recorded for the whole of 2014, according to MIDF Research.

“With two trading days left, the cumulative outflow for June 2015 is set to exceed RM3 billion. It would be the biggest monthly outflow since January 2014. For 2015, last week’s selldown increased the cumulative net foreign outflow to RM8.7 billion, surpassing the RM6.9 billion outflow for the entire 2014,” said MIDF Research head Zulkifli Hamzah in his weekly fund flow report yesterday.

Zulkifli said foreign investors had been net sellers on the local bourse for nine consecutive weeks, and that it had been the longest stretch of foreign withdrawal since the last three months of 2013.

He explained that last week, investors classified as “foreign” sold equities listed on the open market of Bursa Malaysia amounting to RM824.7 million on a net basis, marking it as a relatively intense week of foreign selling.

This is a significant jump when compared with the RM372.4 million sold the week before, he said.

“Foreign investors were net sellers in the open market every single day of the week, although we noted that the situation was similar in Jakarta and Manila. The net sale amount was more than RM100 million every day.

“Last Thursday, the net outflow surged to RM269.2 million, the ninth highest in a day this year, and the 21st day that the amount had exceeded the RM200 million mark,” he said.

Zulkifli said that in comparison, net daily foreign sale in the open market exceeded RM200 million for 23 days in 2014.

Zulkifli, however, noted that the heavy selling last week was on the back of moderate volume.

“Indeed, foreign participation (daily average gross purchase and sale) dropped significantly by 23% to RM788.8 million, the lowest this year — even lower than during the Chinese New Year.

“Local institutions mopped up RM846.8 million in the open market last week, on an active participation rate of RM2.13 billion.

“Local funds have mopped up RM9.9 billion this year, compared with RM8.2 billion in 2014. Retailers remained on the sidelines,” he said.

Regionally, Zulkifli said the performances of equity markets around the world were on divergent paths last week.

He said that in the more developed markets, the focus was clearly on Greece, ahead of the European finance ministers meeting on Saturday.

Zulkifli said France’s CAC and Germany’s DAX indices led the table with gains of 5.1% and 4.1%, respectively, as optimism rose that Greece will strike a deal with its lenders.

But the meeting on Saturday was a non-event after Greece had unilaterally broken off negotiations over a new bailout deal, and called for a national referendum instead.

“In Asia, all eyes were on China, as the benchmark CSI 300 index remained volatile and closed the week lower by 6.5%, all of which attributable to the 7.9% crash last Friday.

“The ChiNext index, which represents small-cap companies in Shenzen, had a harrowing week falling 11.9%, with much of the loss registered last Friday as the index was routed 8.9%,” he added.

This article first appeared in The Edge Financial Daily, on June 30, 2015.