Foreign selling pace on Bursa speeds up ahead of long weekend

KUCHING: The pace of foreign selling on Bursa Malaysia accelerated last week ahead of the long weekend, analysts observed in the latest fund flow report.

According to the research arm of MIDF Amanah Investment Bank Bhd ( MIDF Research), based on preliminary data from Bursa which excluded off market deals, international funds dumped RM663.4 million net of local equities last week, the highest in nine weeks and was 40 times more than the amount withdrawn in the preceding week.

“International funds snapped up a modest amount of local equities on Monday to a tune of RM18.3 million net.

“However, foreigners slowly sold off RM41 million net on Tuesday,” MIDF Research said.

“Later on Wednesday, the level of foreign net outflows swelled to RM369.9 million net, a level not seen since July 6, 2018 amidst fears of US President Donald Trump imposing tariffs on an additional US$ 200 billion worth of Chinese imports.”

Other regional peers that the research arm tracked namely South Korea, Taiwan, India, Thailand, Indonesia and the Philippines also experienced a sell down that day which dragged the ringgit by 6.11 per cent to RM4.1477 – the lowest level in nine months.

However, MIDF Research highlighted that foreign selling on Bursa eased a little to RM209.7 million net on Thursday which helped lift the local bourse by 0.17 per cent after five consecutive days of losses.

“Foreign net attrition shrank further to RM61.1 million net on Friday while the FBM KLCI marginally gained by 0.03 per cent due to last minute bargain hunting ahead of the four- day weekend.”

MIDF Research further highlighted that the year-to- date outflow from Bursa breached above the RM9 billion mark, approximately offsetting 90 per cent of the total foreign net inflow seen in 2017.

Notwithstanding this, Malaysia still retained its position as the nation with the second lowest foreign outflow amongst the four Asean markets the research arm monitored.

“We note that the average daily traded value (ADTV) amongst all three investor groups (retail, local institutions and foreigners) experienced a weekly drop.

“The weekly ADTV of the retail market dropped the most during the week by 25.1 per cent to RM850 million while the ADTV of foreign investors only dropped by 5.7 per cent but still remained above RM1 billion for its ninth consecutive week.”

Overall, Genting Bhd registered the highest net money inflow of RM8.32 million last week, followed by Petronas Chemicals Bhd with the second highest net money inflow of RM4.21 million.

Inari Amertron Bhd saw the third highest net money inflow of RM3.48 million.

On outflows, Public Bank Bhd saw the largest net money outflow of RM22.35 million last week.

Tenaga Nasional Bhd recorded the second largest net money outflow RM18.39 million during the week under review while Petronas Gas Bhd registered the third largest net money outflow of RM9 million.