MIDF Research: Fund outflow lowest in 11 weeks
KUALA LUMPUR: Foreign net selling of Malaysian equities slowed to RM87.9 million last week from RM1.13 billion in the preceding week, according to MIDF Research.
This was the lowest in 11 weeks, it said in its weekly fund flow report yesterday.
“For last month, offshore investors sold RM2.67 billion net of local equities, more than half of what was sold in the preceding month.
“In comparison to other six Asian peers that we are monitoring, Malaysia has the thirdsmallest foreign net outflow on a year-to-date basis after Indonesia and the Philippines. The year-todate foreign outflow from Malaysia came to RM10.3 billion.”
The firm said Bursa Malaysia began last week on a gloomy note as foreign investors pulled out RM115.8 million net of equities.
This was despite the announcement of more stimulus measures by the Bank of Japan, which included the additional purchase of commercial papers and corporate bonds.
MIDF Research said foreign net selling activity dipped last Tuesday to RM95.4 million as investors acknowledged the progress in the global fight against the Covid-19 pandemic but remained cautious amid a painful earnings period.
“There was a massive drop in foreign net outflow to RM800,000 on Wednesday. Most Asia-Pacific stocks also posted gains on cautiously positive sentiment that steps by governments around the globe to ease lockdowns will not set off a new deadly round of respiratory illness.”
However, foreign investors scooped up RM124.5 million net of local equities on Thursday, the last trading day of the month. “The local bourse followed suit to gain two per cent higher, settling above 1,400 points. As such, the 11-day selling streak on Bursa Malaysia was snapped.”
MIDF Research said risk-on sentiment was sparked by the effectiveness of a drug by Gilead Sciences against the Covid-19.
“In terms of participation, foreign investors saw a 9.4 per cent weekly decline in average daily traded value, the largest among other investor groups,” the research firm added.