Offshore investors continue to reduce exposure on Bursa

KUCHING: Offshore investors continued to reduce their exposure on stocks listed on Bursa Malaysia for the 17th consecutive week, analysts observed in the latest fund flow report.

According to the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research), based on data from Bursa, international investors sold RM539.2 million net of local equities last week, half of what was disposed in the week before.

“So far in 2020, foreign investors have sold RM15 billion net on Bursa,” MIDF Research said.

“In comparison with the other six Asian markets we track, Malaysia still has the fourth smallest foreign net outflow on a year-to-date basis.

“As markets reopened from the long weekend, international investors took out RM250.6 million net of local equities.”

Nevertheless, the research arm recapped that foreign funds came into the local market at a tune of RM1.4 million net on Wednesday, snapping the 11-day selling spree on Bursa.

“The modest entry of foreign funds into Malaysia on Wednesday coincided with the local bourse settling at 1,575.3 points, the highest close since late January 2020.

“Risk-on sentiment was spurred on Wednesday amidst the recovery movement control

So far in 2020, foreign investors have sold RM15 billion net on Bursa. In comparison with the other six Asian markets we track, Malaysia still has the fourth smallest foreign net outflow on a year-to-date basis. MIDF Research

order taking effect.”

MIDF Research observed that the foreign net buying in the local market was short-lived on Thursday as international funds sold -RM274.6m net.

It noted that investors’ appetite was adversely affected by the Federal Reserve’s indication on keeping interest rates unchanged until 2022 while warning on a long economic recovery from the economic recession.

“The level of foreign net selling dropped substantially to just RM15.5 million on Friday. Meanwhile, the overall mood in the market was sombre as investors grew warier of a second wave of Covid-19 infections.

“Moreover, the US weekly jobless-claims data which showed 1.5 million Americans filing for unemployment insurance in the week before strengthened the Federal Reserve’s cautious commentary earlier on Wednesday.”

MIDF Research highlighted that in terms of participation, all investor groups recorded a weekly decline in their average daily traded value (ADTV).

“Foreign investors was the group that experienced the smallest weekly decline in their average daily traded value ADTV of 13.2 per cent to reach RM1.5 billion. Despite the drop, the ADTV is still healthy above the RM1 billion mark.”

Overall, Hong Leong Bank Bhd registered the highest net money inflow of RM11.42 million last week, followed by CIMB Group Holdings Bhd with the second highest net money inflow of RM10.33 million. Public Bank Bhd saw the third highest net money inflow of RM10.13 million.

On outflows, Top Glove Corporation Bhd saw the largest net money outflow of 11.62 million last week.

Time Dotcom Bhd recorded the second largest net money outflow RM4.35 million during the week under review while AMMB Holdings Bhd registered the third largest net money outflow of RM3.53 million in the review week.