Foreign net selling on Bursa jumps to eight-week high

PETALING JAYA: International investors sold RM659.7 million net in local equities last week, the largest outflow seen in eight weeks.

For the month of January 2020, international funds have sold RM138.3 million.

In a note by MIDF Research, Bursa Malaysia started the week on a sombre note as offshore investors sold RM70.9 million on Tuesday.

The ringgit also followed suit to lead decliners in Asia with a 0.7% depreciation against the greenback due to growing concerns over the spread of the Wuhan coronavirus.

Travel related counters such as Malaysia Airports Holdings Bhd and AirAsia Group

Bhd lost ground to decline by 6.7% and 3.8% on the same day.

Foreign net selling activity picked up steam to reach RM234.1 million on Wednesday as the number of people infected with the coronavirus reached around 6,000.

International investors continued selling for the third consecutive day on Thursday at a tune of RM104.2 million.

“Although the Fed’s move to leave interest rates unchanged was expected, sentiment waned after Fed Chair Jerome Powell cited uncertainties on trade policy and the pandemic outbreak,” it said.

Friday experienced another bloodbath as offshore funds offloaded RM250.5 million net following the World Health

Organisation’s declaration of the coronavirus as a global health emergency.

The FBM KLCI followed suit to decline 0.9% to 1,531.1 points, the lowest close in more than five years.

“In comparison to the other three Asean markets we track, Malaysia has the smallest foreign net outflow on a year-to-date basis after Thailand and the Philippines,” MIDF noted.

In terms of participation, the average daily traded value (ADTV) of foreign investors surged by 67.2% year-on-year during the week despite the holiday shortened week.

In addition, the ADTV breached the healthy level of RM1 billion at RM1.13 billion.