PETALING JAYA: Offshore investors continued to reduce their exposure on Bursa Malaysia for the seventh straight week, albeit at a lower pace, according to MIDF Research.
Foreign funds offloaded RM324.5 million net local equities last week. It was the lowest in comparison to the other six markets, namely South Korea, Taiwan, Thailand, the Philippines, India and Indonesia.
The research house said Bursa started the week on the wrong foot as foreign funds sold RM243.3 million on Monday.
“Risk sentiment was affected by the US-China trade tensions reaching a fresh peak as both nations slapped new tariffs on each other’s goods.”
On Tuesday, the level of foreign net selling activity inched higher to reach RM293.6 million net selling, the highest in three weeks, despite president Trump’s statement that the US still wants a deal after praising comments by China’s chief negotiator on trade.
The following day saw a reprieve in foreign net outflows as local equities saw a substantially lower level of net equities sold of RM13.2 million.
“However, the local bourse continued to drop 0.1% to close at 1,589.8 points on the same day, the lowest close since September 2015,” said MIDF.
Nevertheless, foreign investors returned to Malaysia on Thursday and Friday at a tune of RM48.5 million net and RM177.1 million net, respectively.
“As such, the 18-day foreign net selling spree was snapped and the local stock barometer jumped 1.1% to 1,612.1 points. The optimism was sparked by China’s plan to not immediately respond to the latest round of tariffs announced by the US effective on September 1, 2019.
With that, the research house said the month of August recorded a total net foreign outflow of RM2.60 billion, the largest since June 2018 which saw RM4.93 billion net of local equities sold.
“Nevertheless, this was the second lowest monthly foreign net outflow amongst the seven markets we monitor.”
On a year-to-date basis, the foreign net outflow from Malaysia stands at RM7.34 billion.
Meanwhile, foreign investors experienced the largest weekly increase of 52.3% in terms of participation with the average daily traded value (ADTV) reaching above the RM1.0 billion mark at RM1.37 billion.
