PETALING JAYA: International investors hastened their exit from Bursa Malaysia last week with a RM774.1 million net of local equities selloff, close to a nine-fold increase of equities sold in the previous week.
According to MIDF Research, foreign funds have taken out RM11.08 billion net of local equities so far.
However, in comparison to the other six Asian countries in its coverage, Malaysia registered the third smallest net outflow on a year-to-date basis after Indonesia and the Philippines.
Monday saw the highest outflow as international funds offloaded RM319.9 million net of local equities, the largest in a day since mid-March this year.
“Market sentiment was hurt by rising tensions between Washington and Beijing after the US President Donald Trump hinted over the weekend that he could impose new tariffs on Chinese goods because of the claim that China lacked transparency on the coronavirus,” said the research house in its fund flow report today.
Foreign net selling activity moderated to RM96.5 million the following day, which coincides with Bank Negara Malaysia’s 50 basis points cut in key interest rate to a 10-year low of 2.0%. At the same time, the local bourse reacted positively to the news by closing 0.9% at 1,376.9 points.
On Wednesday, foreign outflow momentum accelerated to RM247.9 million as investors booked profits ahead of Thursday’s public holiday.
As markets reopened on Friday, foreign funds resumed its selling activity albeit a lower pace of RM109.8 million net of local equities.
“Investors cheered a call between Washington and Beijing that eased tensions and wagered that moves to open up economies after coronavirus lockdowns will succeed,” said MIDF Research.
In terms of participation, it pointed out that foreign investors were the only investor group which recorded a weekly decline in its average daily traded value (ADTV).
The ADTV of foreign investors decreased by 10.3% for the week to reach below RM1 billion at RM903 million, the lowest in 16 weeks.