Foreign funds remain net sellers on Bursa for third week running

KUALA LUMPUR: Foreign funds have remained net sellers on Bursa Malaysia for the third week running, analysts observe in the latest fund flow report, marking the fourth weekly outflow so far this year.

According to the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research), based on data from Bursa, foreign funds disposed RM447.7 million net of local equities, the largest in nine weeks.

“The local bourse gained 0.2 per cent on Monday to settle at 1,725 points as President Trump said that he will extend the deadline to raise tariffs on Chinese goods beyond last week as progress was made between the two nations.

“Nonetheless, foreign investors sold RM49.6 million net on Monday as the decline in consumer prices in January for the first time in a decade remained in investors’ minds,” MIDF Research said.

MIDF Research noted that on both Tuesday and Wednesday, the level of foreign net selling tapered to below RM20 million at RM14.7 million.

It further noted that the reduction of foreign net selling occurred despite the geopolitical tension between India and Pakistan.

“Foreign net selling then peaked on Thursday at RM211.6 million, the highest in a day so far in 2019 following the failure of the Trump-Kim summit in Hanoi.

“Friday’s foreign net selling was still high at RM157.2 million net as the changes for the MSCI index came into effect, causing foreign funds to rebalance their portfolios in anticipation of the increased weighting of China.”

MIDF Research also highlighted that for the month of February 2019, international investors dumped RM815.6 million net.

“This brings the year-todate foreign net inflow into Malaysia to RM53.3 million or US$10.4 million. In comparison to regional peers.”

On the regional front, Malaysia remained as the nation with the lowest foreign net inflow amongst the four Asean markets the research arm monitored with Indonesia taking the lead with a year-to-date net inf low of US$690.9 million or approximately RM2.8 billion.

“We note that participation amongst the three investor groups remained healthy. However, only foreign investors saw a 0.6 per cent increase in terms of average daily traded value (ADTV) last week while local institutions and retail investors experienced a drop more than four per cent in their ADTV.”