International investors turn into selling mode on Bursa

KUALA LUMPUR: After three uninterrupted weeks of foreign net inflows into stocks listed on Bursa Malaysia, international investors turned into selling mode albeit at a marginal pace, analysts observed in the latest fund flow report.

According to the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research), international funds sold RM69 million net of local equities last week. This was the second smallest weekly foreign net outflow recorded so far in 2018.

“Nevertheless, Malaysia saw the lowest level of foreign attrition last week amongst the four Asean markets we monitor,” MIDF Research said.

Bursa saw a decent foreign net inflow of RM19.7 million on Monday, it said, but this was later cancelled off by a small net outflow worth RM36.2 million on Tuesday, despite the revised trade pact between the US and Canada.

“Foreign funds were on a roll on Wednesday and Thursday as they mopped up local stocks worth more than RM70 million on both days.

“Interestingly, foreign investors in other regional peers namely the Philippines, Thailand and Indonesia were reducing their exposure during the same period.”

That said, the research arm noted that offshore funds were back in selling mode on Friday but at a heightened level of RM209.3 million net, the highest in 16 trading days. It further noted that the local bourse followed suit to decline by 0.72 per cent to 1,777 points on the same day, the lowest close since late July 2018.

“Risk aversion was spurred by the rise in US 10-year treasury yields overnight which breached above 3.2 per cent, a level not seen in seven years.”

On the total foreign net outflow from Malaysia to date, MIDF Research pointed out that as of last Friday, it stood at RM8.6 billion. This offset approximately 86 per cent of last year’s RM10.3 billion foreign net inflow.

Meanwhile, Malaysia still retained its position as the nation with the second lowest year-to-date foreign net outflow amongst the four Asean markets the research arm tracked.

“Participation of foreign investors dipped as its weekly average daily traded value (ADTV) ended 8.2 per cent below the RM1 billion mark for the first time in 13 weeks.

“Meanwhile, participation in the retail market and local institutional funds remained healthy above RM800 million and RM2 billion respectively.”

Overall, Public Bank Bhd registered the highest net money inflow of RM40.29 million last week, followed by UMW Holdings Bhd recorded the second highest net money inflow of RM6.77 million. British American Tobacco Bhd saw the third highest net money inflow of RM5.63 million.

On the other hand, Petronas Chemicals Bhd saw the largest net money outflow of RM47.52 million last week. Tenaga Nasional Bhd recorded the second largest net money outflow RM18.48 million during the week under review while Petronas Gas Bhd registered the third largest net money outflow of RM8.3 million.