PETALING JAYA: Foreign fund inflows on Bursa were short-lived as offshore funds sold RM249.3 million net of local equities last week, according to the weekly outflow report by MIDF Research.
The week started strong following the long weekend as international funds snapped up RM56.8 million of net local equities on Tuesday, lifting the local bourse 0.2% higher to settle at 1,604.3 points, the highest close in five trading days.
The inflows bucked the trend as other markets experienced outflows following the drone attack on Saudi Arabia’s oil facilities.
However, the research house said foreign funds started to gradually reduce their exposure from Wednesday until the end of the week.
“Wednesday, saw a foreign net outflow of RM40.5 million as the anticipation of the Federal Reserve’s decision on interest rates outweighed the positivity from Saudi Arabia’s partial restoration of oil its production.”
On the following day, the offshore funds outflows doubled in pace to hit RM97.6 million net following the second rate cut by the Federal Reserve this year.
“Worries were partially caused by the US policy makers were divided on the need for further easing following Wednesday’s rate cut,” said MIDF.
Subsequently, the KLCI followed suit to decline the most during the week by 0.30%.
Foreign outflows escalated further on Friday, as offshore funds sold RM169.9 million net of local equities despite the series of stimulus measures by other major central banks during the week.
In terms of participation, foreign investors experienced the largest weekly gain of 55.8% in the average daily traded value to remain above the RM1.0 billion mark at RM1.79 billion.
For the month thus far, international investors have sold RM335.8 million net of local equities on Bursa, the lowest among its Asean peers.
On a year-to-date basis, international funds have taken out RM7.86 billion worth of local equities from Bursa.
