Foreign attrition on Bursa enters ninth week

PETALING JAYA: Bursa Malaysia saw its ninth week of foreign attrition last week but at a slower pace, as the amount disposed by foreign investors retreated below RM1 billion to RM705.4 million net.
According to MIDF Research, offshore investors were net sellers from Monday to Thursday with none of the days recording attrition above RM300 million net.
“Monday had the highest net outflow during the week of RM291.4 million as the escalating trade dispute between the US and China stoked risk aversion,” it said in its fund flow report today.
Despite foreign selling activity slowing down to a tune of RM206.1 million net later on Thursday, the FBM KLCI dropped further to 1,665.68 points, the lowest close since January 2017 following the slump in Wall Street overnight.
The slump in Wall Street was spurred by President Donald Trump’s economic adviser Larry Kudlow’s comments on the US’ hard line on trade in spite of Trump’s softer stance.
The tide turned on Friday when foreign investors mopped up RM259.4 million net, snapping a 37-day long episode of foreign attrition amidst window dressing activities.
The FBM KLCI followed suit to snap its four-day losing streak by closing 1.55% higher that day, the biggest daily gain so far in 2018.
“We note that Friday’s foreign net inflow is in conformity with other regional peers we track namely the Philippines, Thailand and Indonesia,” said MIDF Research.
For the month of June, the amount of net outflows from Malaysia reached RM4.93 billion, bringing the 1H18 cumulative outflow in 2018 to RM6.82 billion net, offsetting more than half of last year’s total net inflow of RM10.33 billion.
“Nonetheless, Malaysia still has the second lowest outflow among the four Asean markets we monitor after the Philippines on a year-to-date basis,” it said.
Participation level of foreigners, retailers and local institutions experienced a weekly dip but activity levels are still deemed healthy as the average daily trade value is still above RM800 million for retailers, RM2 billion for local institutions and RM1 billion for foreign investors.