Malaysia leads Asean in year-to-date foreign outflows, says research house

AFP pic.

PETALING JAYA: Offshore investors marked their fourth straight week of exiting Malaysia at a relatively stronger pace last week, according to MIDF Research.

This caused Malaysia to suffer the highest foreign net outflow among the four Asean markets tracked by MIDF. On the other hand, Indonesia continues to lead with a year-to-date foreign net inflow of US$817.9 million or above RM3 billion amid the pre-election hype in the nation.

Foreign net selling occurred on every day of the week, stretching the daily selling streak to 12 days, matching the exit between July 2 to 17, 2018.

According to data from Bursa, MIDF said foreign funds pulled out RM903.2 million net of local equities, the most in 21 weeks. Foreign net outflow reached RM198.6 million on Monday, before swelling further to RM263.3 million on Tuesday, the largest in a day so far this year.

“We observed that the massive sell-down was in sync with other Asian peers, namely South Korea, Indonesia and Taiwan after an overnight sell-off on Wall Street amid an unexpected 0.6% fall in US construction spending for December 2018,” MIDF Research said in its report released today.

The level of foreign net selling gradually tapered over the next two days to reach RM105.2 million on Thursday. The shrinkage of foreign selling mainly came from news of China pledging to introduce stimulus measures to boost the economy.

While the local bourse followed suit to make marginal gains, a heavy sell-off occurred again on Friday to the tune of RM193.3 million. Losses across Asian markets, including Malaysia, accelerated following the 20.7% year-on-year (yoy) slump in China’s exports in February.

The international investors have sold RM1.06 billion net for the first six trading days of March. Foreign funds have so far disposed RM849.9 million net on a year-to-date basis.

CIMB Group Holdings Bhd registered the highest net money inflow of RM19.13 million last week. Its share price dipped 5.11% for the week, underperforming the local bourse which had a 1.23% weekly loss.

MIDF said Tenaga Nasional Bhd recorded the second highest net money inflow of RM9.17 million. Its share price ended 2.91% lower for the week, again underperforming the benchmark which was 1.23% lower.

MY EG Services Bhd saw the third highest net money inflow of RM4.13 million. Its share price ended 16.67% higher during the week under review, substantially outperforming the local bourse.

Public Bank Bhd saw the largest net money outflow of RM14.06 million last week. Its stock price lost 0.61% for the week outperforming vis à vis the FBM KLCI which decreased by 1.23% during the review week.

Petronas Chemicals Group Bhd recorded the second largest net money outflow of RM5.34 million during the week under review. Its share price was 1.74% higher during the week, outperforming the market benchmark which had a 1.23% weekly loss.

MIDF said that net money outflow amid the advancing share price may indicate a sell-on-strength stance among some investors.