PETALING JAYA: Offshore investors lessen the pace of net selling on Bursa to a tune of RM270.0 million net of local equities last week as compared to RM339.4 million in the preceding week, marking the 21st consecutive week of foreign net selling.
“So far in 2020, foreign investors have sold RM16.9 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 markets reopened on Monday last week, international investors acquired RM79.9 million net of local equities, snapping the 13th consecutive days of foreign net outflow. However, this quickly reversed the following day on Tuesday which recorded the highest foreign net outflow last week amounted to RM289.6 million possibly on fear of the global surge of Covid-19 cases, dampening hope on a faster economic recovery.
MIDF noted that the highest foreign net inflow occurred on Wednesday last week at a tune of RM229.1 million following the Overnight Policy Rate cut by 25bps to record low of 1.75% which could possibly help to prop up the pace of economic recovery amidst the Covid-19 pandemic. However, the accumulation phase by foreign investors was short-lived as they turned net seller of local equities for the next two days.
The foreign net selling on Thursday and Friday was probably due to negative news flow on surging coronavirus infections globally and the decline of distributive trade and Industrial Production Index in May on a year-over-year basis in Malaysia last week.
“In comparison to another three South East Asian markets that we tracked last week, Malaysia recorded the second highest foreign net outflow followed by Indonesia and the Philippines posted the highest net outflow. While Thailand was the only market that registered a foreign net inflow.”
In terms of participation, retail and institutional groups recorded a weekly increase in their average daily traded value (ADTV) by 37.6% and 34.2% respectively while the foreign investors experienced a weekly increase in their ADTV by 29.1% to reach RM1.3 billion which was above the healthy level of RM1.0 billion.