Net foreign sales rises to RM589.62 million
KUALA LUMPUR: Foreign investors continued to remain as net sellers, as total net outflow rose to RM589.62 million from RM394.34 million recorded the previous week.
The local equities market resumed trading on May 27, after being closed on Monday and Tuesday for the Hari Raya Aidilfitri holiday.
An analyst said markets are expected to remain guarded going into the week ahead, albeit with a little bit of enthusiasm following the gradual reopening of economies.
Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) recovered by 20.8 per cent, rising to 1,473.25 points from the previous low level of 1,219.72 points recorded on March 19.
“It appears that the gradual reopening of the economy has supported the equities market,” he said to Bernama.
Additionally, Mohd Afzanizam
It appears that the gradual reopening of the economy has supported the equities market. Dr Mohd Afzanizam Abdul Rashid
said the economic indicators have also showed signs of stabilisation after a steep fall during April.
For instance, he said the Composite Purchasing Managers’ Index for the United States (US), eurozone, UK and Japan in May had increased to 36.4 (April: 27.0), 30.5 (April: 13.6), 28.9 (April: 13.8) and 27.4 (April: 25.8), respectively.
Moreover, unemployment claims in the US for the week ending May 16 also declined to 21.0 million from 24.9 million in the previous week, suggesting that more Americans have found employment with the reopening of their economy.
“However, concerns on the bilateral relations between the US and China due to the latter’s plan to impose new security law in Hong Kong could lead to volatile market sentiments.
“In that sense, market correction could happen along the way as investors would want to pocket their profits and assess the evolving bilateral ties between the two economic giants,” said Mohd Afzanizam.
Next week, he said, all eyes would be focusing on the US’ Institute for Supply Management Index for the manufacturing, non-manufacturing and the employment sectors.
“These numbers are expected to be better for the month of May. It seems as if all the bad news has been priced in by the markets.
“The key question now is how quick the reopening of the economy can be done and when we can get the Covid-19 vaccine,” said Mohd Afzanizam. — Bernama