Foreigners turn net sellers on Bursa

PETALING JAYA: A reversal of trend occurred last week, with an exodus of foreign funds from stocks listed on Bursa Malaysia after six straight weeks of buying, according to MIDF Research.
Based on preliminary data from Bursa, which excluded off market deals, international investors withdrew RM1.75 billion net of local equities last week, wiping off around 92% of net inflows worth RM1.92 billion accumulated in the previous three weeks.
“In fact, this was the first weekly attrition in seven weeks and the highest since the August 2013, the year of the 13th General Election,” MIDF said in its fund flow report.
Foreign funds were net sellers on all five trading days last week. Tuesday saw a net outflow of RM868.6 million net, the largest attrition in more than four years, coinciding with FBM KLCI’s biggest single day drop since December 2014 of 2.19% to a 23-trading day low at 1,812 points.
This came to no surprise as investors fled from equities spooked by the rise in US bond yields in the week before and following Wall Street’s turmoil on Monday.
Thereafter, foreign selling levels normalised to levels ranging from RM130 million-RM160 million net on Wednesday and Thursday as investors shrugged off data which showed Malaysia’s exports rose at a much slower pace for the second straight month following overnight gains on Wall Street.
However, foreign selling rose back to a high level of RM323.3 million net on Friday as Dow Jones declined by more than 1,000 points for the second time in a week.
“Despite the accelerated momentum of selling activity, foreigners have mopped up RM1.86 billion net during the first six weeks of 2018 compared to RM612.8 million net during the same period in 2017.”
Foreign participation remained vibrant as the foreign average daily trade value stood at RM1.6 billion marking its sixth week of being above the RM1 billion threshold.
Meanwhile, the strong foreign selling momentum paved the way for local fund managers to acquire RM1.8 billion net, a level not seen since November 2016.