Largest foreign fund outflow from Bursa in 8 weeks

18 Feb 2019 / 19:25 H.

PETALING JAYA: Foreign funds took out RM369.2 million net of local equities last week, the largest weekly foreign net outflow in eight weeks.

“International funds turned net sellers on Bursa last week, snapping the five-week buying spree on Bursa,“ MIDF Research said in its fund flow report today.

On a daily basis, the five-day foreign net buying streak came to an end on Monday as global funds sold RM41.6 million net of local equities. However, foreign investors slowly returned to Bursa on Tuesday at a tune of RM6.6 million net, the lowest level in a day since early November last year.

This was followed by net ouflows of RM122.1 million on Wednesday as investors ignored US President Donald Trump’s flexibility on the deadline for trade negotiations with Beijing.

Likewise, the local bourse shed 2.11 points or 0.1% to end at 1,685 points, the lowest close during the week. Meanwhile, other Asian peers namely South Korea and Taiwan recorded sizeable foreign net inflows.

While foreign net selling still occurred on Thursday and Friday, the pace slowed down to RM106.4 million and RM105.7 million, respectively.

MIDF noted that Malaysia’s 4Q18 GDP growth of 4.7% year-on-year, which was above market expectations of 4.5% year-on-year estimates, helped to ease the jitters coming from the deceleration in China’s factory inflation in January 2019, which slowed down for the seventh uninterrupted month.

For the first half of February 2019, offshore investors have so far disposed RM206 million net, lowering the year-to-date foreign net inflow into Malaysia to RM820.1 million.

“On the regional front, Malaysia is now the nation with the lowest foreign net inflow amongst the four Asean markets we monitor with Indonesia taking the lead with a year-to-date net inflow above RM3 billion while Thailand is the only one with a net outflow,“ MIDF said.

Participation amongst all investor groups increased during the week. Foreign investors recorded the smallest weekly advance in average daily traded value, increasing by 15.3% to breach above the healthy level of RM1 billion.

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