Net foreign selling continued last week but at slower pace

KUALA LUMPUR: Foreign funds continued to exit Malaysia as investors shifted their assets to safe havens, such as bond and money markets.

This was due to the bearish global market.

Bank Islam Malaysia chief economist Dr Mohd Afzanizam Abdul Rashid said net foreign selling in the first four days of last week amounted to RM162.8 million, a decline from RM291.9 million in the same period the previous week.

“Retail investors were the main buyers on Bursa Malaysia at RM110.1 million from last Monday to Thursday, a rebound from RM11.3 million in the April 1-April 4 period.

“Local institutions’ participation stood at RM52.8 million between last Monday and Thursday, compared with RM303.2 million between April 1 and 4.”

He said the main trigger would be external developments such as the Brexit outcome, the dovish stance among major central bankers and the downward revision of global growth by the International Monetary Fund.

“Naturally, during such a period, investors would be very defensive, leading to higher demand for safe-haven securities such as fixed-income instruments.”

Phillip Capital Management senior vice-president (investment) Datuk Dr Nazri Khan Adam Khan said the drop in net-selling value on a week-to-week basis was underpinned by local factors, including better commodity prices, ringgit stabilisation and the expectation of better gross domestic product for the second quarter of this year.

He said foreign funds had sold RM1.8 billion net in local equities year-to-date.

Bursa Malaysia would likely see a technical rebound this week, he added.