PETALING JAYA: Foreign selloff on Bursa Malaysia intensified as international investors sold RM1.13 billion net of local equities last week, the highest in five weeks.
MIDF Research noted that last week started on a “sombre” note as foreign investors pulled out RM215.4 million net of local equities.
“This was despite news that China slashed its benchmark lending rate for the second time this year to boost the nation’s economy,” it said in a report.
The following day saw an accelerated foreign outflow on Bursa to reach RM287.9 million, a level not seen in more than a month.
The research house pointed out that the risk-off sentiment grew following the crash in US oil prices overnight and it conforms to the other Asian markets under its coverage, namely South Korea, Taiwan, India and Thailand.
Wednesday saw a slight slowdown in foreign net outflow to a tune of RM186.6 million as interest in rubber glove manufacturer stocks helped outweighed the overall selling activity amongst offshore investors.
Consequently, it noted that the Bursa Malaysia Healthcare index added 31.8 points on the same day.
The next day saw little change to the momentum with a RM198.0 million net of local equities sold. MIDF Research stated that the anticipation of US lawmakers moving closer to vote from the US$484 billion bill for small businesses and hospitals have helped put a lid on the foreign net outflows.
“Foreign net outflow then jumped to RM240.6 million on Friday amidst reports that Gilead Sciences Inc’s potential antiviral drug for the Covid-19 had failed in its first randomised clinical trial,” it said.
In terms of participation, foreign investors saw an 8.0% weekly increase in its average daily traded value (ADTV), the smallest amongst other investor groups.
Nevertheless, the absolute ADTV of foreign investors remained healthy above the RM1 billion mark.