Foreign funds turned net sellers last week

PETALING JAYA: Foreign funds offloaded RM631.4 million net of local equities, wiping out the net inflow of RM458.2 million recorded in the week before, according to MIDF Research.
“Offshore investors were already selling a lot on Monday to a tune of RM142.3 million net as the crisis in Turkey rippled across emerging markets including Malaysia. It came to no surprise that local stocks with exposure to Turkey such as Malaysia Airports Holdings and IHH Healthcare were the major decliners that day with losses of more than 5%,” it said in a research note yesterday,
MIDF said the level of foreign net attrition slowly tapered on Tuesday and Wednesday to RM127.1 million and RM85.4 million, respectively as the Turkish lira rebounded from Monday’s massive drop.
“The FBM KLCI even followed suit to advance on these two days while other regional markets such as Thailand and Hong Kong were in the red zone during the same period.”
However, the research house said foreign net selling activity gradually accelerated on Thursday and Friday to RM127.9 million and RM148.7 million, respectively as news of China and the US holding trade discussions in late August was not sufficient to spur risk-on mood following the announcement of Malaysia’s lower-than-expected Q2 GDP growth of 4.5% against market expectations of 5.2%.
MIDF noted that August has so far seen a foreign net outflow of RM128.6 million, while year-to-date outflow stands at RM8.6 billion.
Participation among foreign investors has been active so far this year as the weekly average daily traded value (ADTV) reached above RM1 billion for 31 out of 33 weeks.
“The weekly ADTV of the retail market and local institutional funds also remained healthy above RM800 million and RM2 billion, respectively despite the drop last week.”