Investors likely to remain guarded this week, says economist

KUALA LUMPUR: The equity market experienced a “zero-sum game” last week as the outflow and inflow of funds were equal despite mounting fears over the Covid-19 pandemic that triggered panic in overseas markets.

Bursa Malaysia was well supported by buying activities from local institutions and the retail sector, which dominated 74.18 per cent of average participation during the first four days of last week.

Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said local institutions remained net buyers, acquiring RM967.3 million in equities during the period, compared with RM650.67 million a week earlier.

He said funds from local retailers doubled to RM461.8 million from RM228.9 million previously.

“I believe that the Employees Provident Fund, Permodalan Nasional Bhd and Retirement Fund Inc were among major supporters of the stock market.”

Bursa Malaysia saw a strong outflow of RM1.43 billion during March 9-12 period against RM879.57 million a week earlier.

Afzanizam said major global stock markets were in bearish territory, plunging by more than 20 per cent, and the FTSE Bursa Malaysia KLCI was no exception.

“As a result, risk aversion has become more rampant as investors are seeking shelter against volatility, leading to lower government bond yields.

“Foreign investors were still net sellers, while Malaysian institutions remained net purchasers.”

He expects Malaysian investors to remain guarded this week.

He added that investors would be awaiting details on possible adjustments to the RM20 billion economic stimulus package announced recently.