RM451 million in equities sold by foreigners last week, says research house

PETALING JAYA: Offshore investors increased their net selling activity in Bursa Malaysia last week, extending the selling streak to a seventh week, according to MIDF Research.

In a research note released today, it said based on data from Bursa, foreign funds sold RM451 million net of local equities last week, the largest weekly foreign net outflow in nine weeks.

There was a reversal in selling by foreigners on Tuesday which the research house attributed to the overnight policy rate (OPR) cut from 3.25% to 3.00% by Bank Negara Malaysia, to stimulate investment and domestic spending activities.

The local bourse followed suit to close 0.4% higher at 1,639 points on Tuesday, the only day during the week which saw a gain. Foreign investors were back in selling mode on Wednesday, selling off RM75.1 million net as concerns over US-China trade tensions abound.

The level of foreign net selling swelled to RM382.5 million on Thursday, the highest in a day so far this year. Worries escalated ahead of Friday’s deadline when the US increased tariffs on US$200 billion worth of Chinese goods from 10% to 25%.

“The huge foreign net outflow was in conformity with other regional peers, namely Thailand, Indonesia, the Philippines and Taiwan,” said MIDF Research.

International funds still sold local equities on Friday but at a lower pace of -RM130.5 million net with the first day trade talks between the US and China making no significant progress.

On a month-to-date basis, Malaysia recorded a foreign net outflow of -RM527.4 million in May 2019. This brings the year-to-date foreign net outflow from Malaysia to RM3.28 billion.

Participation among foreign investors experienced a slowdown last week when foreign investors recorded a 4.7% weekly decline in average daily traded value. However, this remained at a healthy level of above RM1 billion, that is RM1.18 billion.