Sixth uninterrupted week of foreign net selling on Bursa

KUCHING: The pace of foreign investors selling shares on Bursa Malaysia rose last week and marked the sixth uninterrupted week of foreign net selling, the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) observed in its latest fund flow report.

Based on data from the bourse last week, foreign funds sold RM314.3 million net of local equities -- this was more than three times the amount withdrawn in the preceding week.

“Monday saw foreign funds withdrawing RM171.8 million net on Monday as disappointing China inflation and trade data sapped investor sentiment,” the research house said in its analysis yesterday.

“Offshore investors continued selling on Tuesday to a tune of RM219.2 million net, the largest in 10 trading days, stretching the daily selling streak on Bursa to four days.

“The sell-off was mainly triggered by Theresa May’s postponement of a parliamentary Brexit vote in addition Japan’s gross domestic product (GDP) contracting the most over four years which offset Wall Street’s overnight rally.”

However, MIDF Research saw that international funds were net buyers on the next two days with Thursday recording the highest foreign net inflow since early November this year worth RM123.3 million.

“Optimism on these ways were sparked by the US-China trade war thaw as China planned to cut tariffs on US-made to 15 per cent from 40 per cent. The local bourse followed suit to record gains above 0.5 per cent on both days.”

On Friday, the research arm observed that the mood turned sombre as China’s retail sales grew at its slowest pace since 2003 while its industrial output rose the least in three years.

“As such, foreign funds pulled out RM133.1 million net of equities from Bursa on the same day.”

MIDF Research highlighted that with two more weeks before 2018 ends, the year-to-date net outflow from Malaysia has reached RM11.1 billion or US$2.73 billion.

Although this amount offsets last year’s net inflow, Malaysia is still the nation with the second lowest year-to-date outflow amongst the seven Asian markets the research arm monitored.