KUALA LUMPUR (Dec 9): Foreign investors sold RM834.6 million of local equities last week, the highest weekly foreign net outflow in 17 weeks, according to MIDF Investment Bank Bhd Research. In comparison, the prior week saw an outflow of RM761.2 million.
In his weekly fund flow report today, MIDF Research's Adam M Rahim said the week started on a subtle note with foreign investors disposing of only RM23.4 million net on Monday following the stronger-than-expected manufacturing data from China.
He said Monday's foreign net outflow was also the smallest in a day since late October 2019.
"International investors later poured out RM260.6 million net of local equities on Tuesday.
"Fears emerged from US's intention to propose tariff on roughly US$2.4 billion in French products in response to a digital services tax impacting US tech companies," he said.
Adam said foreign net selling then peaked during the week on Wednesday at RM346.7 million net as US President Donald Trump downplayed China's urgency in reaching a deal by stating that he is comfortable to use tariffs as a source of international economic leverage for the presidential election in 2020.
He said offshore investors continued to reduce exposure albeit at a slower pace tune of RM88.3 million.
"Risk-on mood improved as the US and China were moving closer to agree on the amount of tariffs which will be rolled back in a phase-one trade deal despite harsh rhetoric over Hong Kong and Xinjiang.
"Momentum of foreign net selling momentum slowed down further to a tune of RM80.4 million on Friday," he said.
Adam said investors cheered the news on China planning to waive retaliatory tariffs on imports of US pork and soy by domestic companies.
"The year-to-date (YTD) foreign net outflow from Malaysia as of last Friday breached the RM10 billion mark to hit RM10.76 billion net.
"This constitutes 92% of last year's total foreign outflow of RM11.69 billion," he said.
Adam said in terms of participation, foreign investors saw a huge drop in average daily traded value (ADTV) by 49.4% to reach below RM861 million, the lowest in six weeks.