Despite constant foreign nett inflow, seen in recent months, he said selling activities outweighed buying activities, with the total value exiting Malaysia, since the second week of February 2011 to date, amounting to RM11.9 billion.
“Foreign outflow became obvious from May 2013 onwards as foreign institutional funds were selling due to concerns surrounding emerging markets in general, including Indonesia and Brazil, and the scenario was not unique to Malaysia,” he told Bernama.
Pong noted that foreign selling accelerated in 2015 and some parts of 2016 due to crude oil prices which hit bottom in 2016.
Pressuring the market further were concerns over emerging economies, and this saw foreign funds withdrawn from emerging markets.
“For the first half of November 2018, we saw some light, but in the second half of the month, the mood turned sombre,” he said, adding that foreign selling of Malaysian equities stood at RM52.3 million in the previous week.
“When oil prices began to rebound, some funds started to flow in, but it was relatively small when compared to the selling trend. At the moment, emerging markets remain unattractive for foreign funds,” he said.
On the local front, Khazanah Nasional Bhd is selling 16% of its stake in IHH Healthcare Bhd to Mitsui & Co Ltd (Mitsui) of Japan for RM8.42 billion.
Following the divestment, Khazanah’s shareholding in IHH will decrease to 26.05%, while Mitsui will be the largest shareholder in Asia’s largest private hospital group with a 32.9% stake.
Khazanah managing director Shahril Ridza Ridzuan commented that the divestment was part of its strategy to grow the business that they had invested in and to find the appropriate time and value to create liquidity for future capital and investment needs.
Commenting on the divestment, Hermana Capital Bhd director Nazri Khan Adam Khan said it was a normal rationalisation exercise for Khazanah to restructure their portfolio and focus on their main businesses.
Meanwhile, on the local currency’s performance for the week just-ended, Nazri said the ringgit was strengthening, driven by unexpected comments by the Federal Reserve that it would not raise US interest rates as frequently as expected in 2019, which is a good sign for emerging currencies.
“It will give some positive momentum to the ringgit which was also supported by higher oil prices,” he said.
Another analyst, Oanda, head of trading for Asia-Pacific Stephen Innes expected the ringgit to trade between 4.17 and 4.20 next week.