Foreign selling on Bursa surges to RM600.7m last week

PETALING JAYA: Off shore investors continued to reduce their exposure on stocks listed on Bursa for the 18th consecutive week, selling RM600.7 million net of local equities last week.

“So far in 2020, foreign investors have sold RM15.7 million net on Bursa. In comparison with the other six Asian markets we track, Malaysia still has the fourth smallest foreign net outflow on a year-to-date basis,“ MIDF Research said in its fund flow report today.

As markets reopened on Monday last week, international investors took out RM358.9 million net of local equities which was a similar trend for all Asian markets on fear of a resurgence in Covid-19 outbreak.

Nevertheless, foreign funds came into the local market at a tune of RM101.6 million net on Tuesday, snapping the three-day selling spree on Bursa. The modest entry of foreign funds into Malaysia on Tuesday coincided with the local bourse settling at 1,517.7 points, denoting a one-day gain of +1.26%. Risk-on sentiment was probably spurred on Tuesday as recovery rate of Covid-19 cases showing signs of stabilisation in the country.

However, the foreign net buying in the local market was short-lived on Wednesday as international funds sold RM83.3 million net. Investors’ appetite probably was adversely aff ected by the political instability in the country with a higher likelihood of a snap election taking place as well as the fresh outbreak of the virus in Beijing.

The level of foreign net selling increased for consecutive three days to RM155.4 million on Friday. Meanwhile, the overall mood in the market was sombre as investors grew warier of a second wave of covid-19 infections, particularly in China and America showing signs of increased infections.

Moreover, the US weekly jobless-claims data on Thursday which showed 1.5 million Americans filing for unemployment insurance in the week before was higher than forecast.

“In terms of participation, foreign investors was the only group that experienced a weekly increase in their average daily traded value (ADTV) of 7.9% to reach RM1.62 billion. Note that the ADTV is still healthy above the RM1.0 billion mark,“ MIDF said.

source https://www.thesundaily.my/business/foreign-selling-on-bursa-surges-to-rm6007m-last-week-IB2614569