Foreign selling on Bursa dropped to RM226.1m last week

03 Aug 2020 / 11:20 H.

PETALING JAYA: Foreign net outflow lessened on Bursa Malaysia to a tune of RM226.1 million net of local equities last week as compared to RM910.2 million in the preceding week, marking the the 24th consecutive week of foreign net selling.

“So far in 2020, foreign investors have sold RM19.0 billion net on Bursa. In comparison with the other six Asian markets we track, Malaysia still has the fourth smallest foreign net outflow on a year-to-date basis,“ MIDF Research said in its fund flow report today.

As market reopened on Monday last week, foreign investors acquired RM63.5 million net of local equities which was also the only day that Bursa experienced a foreign net inflow.

On Tuesday, foreign investors reverted to being net sellers in which Bursa recorded a foreign net outflow of RM49.3 million despite Malaysia posted a record high trade surplus of RM20.9 billion in June as exports rebounded to positive territory for the first time since the movement control order. The positive sentiments was short-lived as new wave of Covid-19 and rising protectionism might hinder countries’ efforts to restart their respective economies.

Note that the foreign net outflow increased on Wednesday and Thursday last week at a tune of RM93.6 million and RM146.6 million respectively. This coincided with the decline in Malaysia’s Producer Price Index (PPI) for local production by 4.0% year-on-year in June to 100.3 and an extension of three-month loan moratorium for targeted groups on Wednesday last week as economic recovery is expected to be subdued amidst surging Covid-19 cases. Foreign investors remained in risk-off mode as domestic political landscape continued to be uncertain and record high contraction in the US and Eurozone economies.

“In comparison to another three South East Asian markets that we tracked last week, Malaysia recorded the second highest foreign net outflow after Indonesia while Thailand experienced the least foreign net outflow,“ said MIDF.

In terms of participation, the retail investors recorded a weekly increase of 23.8% in average daily traded value (ADTV) to RM5.6 billion while the foreign investors experienced the least weekly increase in ADTV by 7.7% to reach RM1.5 billion which was above the healthy level of RM1.0 billion.

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