Foreign investor sell off continues for ninth straight week

PETALING JAYA: Last week, Bursa’s foreign fund outflow accelerated with international investors dumping RM638.6 million net of local equities, marking the ninth consecutive week of selloff on the exchange.

MIDF Research reported that in comparison to its six Asian peers that it monitors, Malaysia remains as the nation with the third smallest foreign net outflow on a year-to-date basis. The year-to-date foreign outflow from Malaysia came to RM9.1 billion.

On Monday, the pace of foreign net selling remained steady, as international investors only sold RM76.8 million net of local equities.

“Foreign investors took the opportunity to accumulate some local equities on Tuesday at a tune of RM20.3 million amidst reports that China’s exports posted a lesser-than-expected decline in March 2020, falling by only 6.6% year-on-year (yoy) compared to the consensus of a 14% yoy drop,” it said in its fund flow report.

Subsequently, the research house noted Bursa inched higher on Wednesday as it closed at 1,387.8 points - the highest close in more than a month, following the IMF’s latest projection that Malaysia’s economic growth will be the fastest amongst Asean-5 countries in 2021.

Despite the IMF’s forecast, it elaborated that foreign investors dumped RM159.5 million of local equities, and the market was instead supported by the purchase of RM241,8 million of net local equities by local institutions.

The momentum of foreign net selling accelerated further to RM240.1 million on Thursday, amidst lacklustre trading on Wall Street spurred by US industrial output numbers, which experienced the biggest drop in more than 70 years last month.

The level of foreign net selling remained high on Friday at RM182.5 million, despite the positive reports of a Covid-19 drug test done by Gilead Sciences Inc and a plan to reopen the US economy.

In terms of participation, MIDF noted that foreign investors were the only group which saw its average daily traded value (ADTV) increase for the week by 5.6% to RM1.03 billion, while retail and institutional investors saw a weekly decline in ADTV by 11.7% and 3.2% respectively.

source https://www.thesundaily.my/business/foreign-investor-sell-off-continues-for-ninth-straight-week-EK2279666