Bursa records 10th consecutive week of foreign attrition

PETALING JAYA: Foreign funds continued its selling streak last week at a net US$704.3 million (RM2.85 billion) compared with the US$705.4 million net seen the week before.
“Foreign investors continued to pare their holdings in stocks listed on Bursa for the 10th consecutive week. This is the longest weekly selling streak recorded since the 20-week selling spree from May to September 2015,” MIDF Research said in its fund flow report today.
Foreign investors were net sellers on every single day of the week. It was notable that the magnitude of foreign net selling from Monday to Thursday was rather contained. During this period of modest selling activity, the highest daily outflow of US$100.4 million occurred on Tuesday, coinciding with FBM KLCI’s lowest closing point of 1,680 points within the same period.
Foreign attrition later surged on Friday to a tune of RM393.6 million net, the highest in a day since June 21. The huge attrition was in conformity with other regional peers namely South Korea and the Philippines. It was no doubt that the main cause for Friday’s major selloff was due to the US-China trade dispute whereby the US officially activated a 25% tariff on US$34 billion of Chinese goods followed by an immediate tit-for-tat measure by the Chinese government.
The cumulative year-to-date outflow from Malaysia as of last Friday stands at RM7.53 billion net, offsetting 75% of last year’s total foreign inflow of RM10.33 billion net. Nevertheless, Malaysia still has the second lowest outflow amongst the four Asean markets after the Philippines on a year-to-date basis.
Foreign participation took a breather last week as foreigners retreated to the sidelines amidst the intensified trade tensions. Foreign average daily traded value (ADTV) substantially declined by 26% to hit below RM1 billion. The retail market meanwhile remained healthy although its ADTV was little changed at RM807.7 million.