Bursa sees largest weekly foreign net outflow in nine weeks
(The Star) – Foreign funds upped their ante in net selling activity last week, extending the selling streak on Bursa Malaysia to the seventh week, according to MIDF Research.
“Based on data from Bursa, foreign funds sold RM450.9mil net of local equities last week, the largest weekly foreign net outflow in nine weeks,” MIDF said in its weekly fund flow report.
The research house said a measurable pace of foreign net selling was observed on Monday at a tune of RM12.6mil before international funds made a return on Tuesday after acquiring RM149.8mil net.
“We opine that the influx of foreign funds into Bursa on Tuesday was mainly attributable to the OPR cut from 3.25% to 3.00% by Bank Negara Malaysia to stimulate investment and domestic spending activities,” MIDF said.
The local bourse followed suit to close 0.4% higher 1,639 points on the Tuesday, the only day during the week which had a gain.
MIDF noted that foreign investors were back in selling mode on Wednesday, selling off RM75.1mil net as concerns of the U.S-China trade tensions linger.
The level of foreign net selling swelled to RM382.5mil net on Thursday, the highest in a day so far this year.
Worries escalated ahead of Friday’s deadline when the US will increase tariffs on US$200bil worth of Chinese goods from 10% to 25%.
It noted that the huge foreign net outflow was in conformity with other regional peers namely Thailand, Indonesia, the Philippines and Taiwan.
International funds still sold local equities on Friday but at a lower pace of RM130.5mil net with the first day trade talks between the U.S and China making no significant progress.
“On a month-to-date basis, Malaysia has recorded a foreign net outflow of RM527.4mil in May 2019. This brings the year-to-date foreign net outflow from Malaysia to RM3.28bil,” MIDF said.
Participation amongst foreign investors experienced a slowdown last week.
The research house said foreign investors recorded a 4.7% weekly decline in average daily traded value (ADTV) last week but still remained at healthy levels of above RM1bil at RM1.18bil.
