Foreign selling spree continues for fifth straight week

KUALA LUMPUR: Foreign funds outflow slowed down to RM1.79bil net of local equities last week, marking the fifth straight week of foreign net selling activities, according to MIDF Research.

For the week ended March 13, international investors took out RM1.91bil net of local equities.

“In comparison to its other six Asian peers that we monitor, Malaysia has the third least foreign net outflow when compared on a year-to-date basis. The year-to-date foreign outflow from Malaysia came to RM7.0bil,” MIDF said in its weekly fund flow report.

The research house noted that Monday recorded a massive foreign net outflow of RM520.4mil, the largest in a day since June 2018.

This coincided with local bourse’s 4.8% drop as concerns over the global economic fallout from the coronavirus pandemic outweighed the Federal Reserve’s emergency interest-rate cut by a percentage point.

Foreign net selling activity remained high at RM383.5m net on Tuesday with the Restricted Movement Order announced by the Government of Malaysia the night before.

The local market also took cue of the 12.0% plunge in U.S stocks overnight, the largest drop since 1987 following President Trump’s statement that disruption from the Covid-19 may last into summer.

Earlier optimism over a U.S. stimulus plan to combat the impact of the coronavirus faded, prompting a RM321.6mil net sell-off on Wednesday, MIDF said.

It said the momentum of foreign net selling slowed down to RM308.6mil net on Thursday while the local bourse declined to 1,219 points, a level not seen since as regional peers namely Indonesia and the Philippines have slashed rates in light of the global pandemic.

“Friday marked the 22nd consecutive day of foreign net selling but saw foreign net attrition reaching below RM300mil to RM260.2mil, coinciding with the Bursa’s 6.9% advance,” MIDF said, adding that Bank Negara Malaysia announced a 100bps reduction in the statutory reserve requirement came into effect the same day.

In terms of participation, the average daily traded value (ADTV) of foreign investors jumped 20.7% to reach RM2.07bil.

On the other hand, retail and local institutional investors recorded a drop in ADTV of not more than 8.0% during the week.

Source: TheStar