Year-to-date net foreign selling on Bursa rises to RM7b

PETALING JAYA: Bursa Malaysia saw its foreign net selling for the fifth week last week as international investors sold RM1.79 billion net of local equities.

“In comparison to its other six Asian peers that we monitor, Malaysia has the third least foreign net outflow when compared on a year-to-date basis. The year-to-date foreign outflow from Malaysia came to RM7 billion,“MIDF Research said in its fund flow report yesterday.

It said last Monday recorded a massive foreign net outflow of RM520.4 million, the largest in a day since June 2018. This coincided with local bourse’s 4.8% drop as concerns over the global economic fallout from the coronavirus pandemic outweighed the Federal Reserve’s emergency interestrate cut by a percentage point.

Foreign net selling activity remained high at RM383.5 million net on Tuesday with the restricted movement order announced by the government the night before. The local market also took cue of the 12% plunge in US stocks overnight, the largest drop since 1987 following US President Donald Trump’s statement that disruption from the

Covid-19 may last into summer.

MIDF noted that earlier optimism over a US stimulus plan to combat impact of the coronavirus faded, prompting a RM321.6 million net selloff on Wednesday.

The momentum of foreign net selling slowed down to RM308.6 million net on Thursday while the local bourse declined to 1,219 points, a level not seen since as regional peers namely Indonesia and the Philippines have slashed rates in light of the global pandemic.

Friday marked the 22nd consecutive day of foreign net selling but saw foreign net attrition reaching below RM300 million to RM260.2 million, coinciding with the Bursa’s 6.9% advance.

“Also on the same day, Bank Negara Malaysia’s 100bps reduction in the statutory reserve requirement came into effect.”

In terms of participation, the average daily traded value (ADTV) of foreign investors jumped 20.7% to reach RM2.07 billion.

Meanwhile, retail and local institutional investors recorded a drop in ADTV of not more than 8.0% during the week.