Foreign selling intensifies, RM1.5b net outflows in Nov

02 Dec 2019 / 13:54 H.

PETALING JAYA: Foreign funds stepped up their selling of equities on Bursa Malaysia to RM761.2 million last week, four times more compared to the preceding week, according to MIDF Research.

With that, November recorded a foreign net outflow of RM1.5 billion, the fifth month of which selling levels exceeded RM1 billion. Nevertheless, it was not as high as Indonesia and South Korea.

On a year-to-date basis, foreign funds have taken out RM9.93 billion of local equities from Malaysia, making up 85.0% of last year’s total foreign outflow of RM11.69 billion.

Foreign funds were net sellers on every day of last week, stretching the daily foreign selling spree to eight days.

MIDF said the local stock barometer saw RM64.8 million net of local equities disposed on Monday as investors assessed Hong Kong’s record election turnout and China’s pledge to step up protection of intellectual property rights.

“The level of foreign net outflow inched higher to RM76.1 million net on Tuesday as foreign investors repositioned themselves in alignment with the MSCI rebalancing. As such the average daily traded value amongst foreign investors surged to RM2.5 billion, the highest since the last round of MSCI rebalancing in late May 2019.”

The research house said foreign investors continued to reduce exposure at a tune of RM88.3 million even as President Trump declared that the first phase of the trade deal was near completion.

“There was no reprieve in risk-off appetite as the foreign net selling later reached RM193 million on Thursday after US President Donald Trump signed a bill supporting Hong Kong protesters.”

“Foreign net selling then peaked on Friday at RM339 million, as the possible retaliation from China towards the US’ support for Hong Kong protesters could put a strain on the current trade negotiations.”

In terms of participation, foreign investors saw a spike in average daily traded value of 71% to hit RM1.7 billion, the largest in 10 weeks.

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