PETALING JAYA: Foreign net outflow accelerated on Bursa to a tune of RM937.5 million net last week as compared to RM226.1 million in the preceding week, marking the 25th consecutive week of foreign net selling.
“So far in 2020, foreign investors have sold RM19.9 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 said in its fund flow report today.
As market reopened on Monday last week, foreign investors disposed RM174.1 million net of local equities, in spite of the Malaysia Leading Index (LI) rebounded to 0.6% year-on-year (yoy) in May from -5.7% in the previous month. This was also the highest recorded LI since Mar-20 due to the reopening of economic activities after the movement control order.
Foreign net outflow increased to RM250.9 million and RM336.9 million on Tuesday and Wednesday last week respectively with the largest net outflow of the week on Wednesday. The negative sentiments were probably due the fear of a new wave of Covid-19 infections globally and deterioration of US-China relationship which might impede the recovery progress of the global economy as well as the uncertain domestic political scene.
Note that the foreign net outflow subsided on Thursday at a tune of RM90.3 million, probably buoyed by the positive sentiments on another potential US stimulus package, better-than-expected US non farm payrolls of 1.76 million additional jobs in July 2020 and higher China’s exports of +7.2% yoy in July.
On Friday, foreign net outflow was the lowest at RM85.3 million, coincided with the Malaysia’s Industrial Production Index (IPI) recorded a slower decline of -0.4% yoy in June, mainly supported by the recovery in manufacturing output.
“In comparison to another three South East Asian markets that we tracked last week, Malaysia recorded the second highest foreign net outflow while Thailand experienced the least,“ said MIDF.
In terms of participation, the retail investors recorded a weekly increase of 50.4% in average daily traded value (ADTV) to RM8.4 billion while the foreign investors experienced the least weekly increase in ADTV by 8.6% to reach RM1.7 billion which was above the healthy level of RM1.0 billion.
