Foreign funds dump most equities in 4 years post-GE14

This is the heaviest weekly selldown in Malaysia since Aug 23, 2013, says MIDF


Bursa Malaysia saw its highest foreign fund selldown in four years as global funds dumped RM2.48 billion of local equities in the open market (excluding off-market deals) last week after the 14th General Election (GE14).

“This is the heaviest weekly sell-down in Malaysia since the week ended on Aug 23, 2013, with a net outflow of RM2.9 billion. Year-to-date net inflow now stands at RM40.2 million,” MIDF Amanah Investment Bank Bhd said in its fund flow report for the week ended on May 18.

International investors remained in selling mode during the election-shortened week ended on May 11, with markets being open only on Monday and Tuesday.

Based on preliminary data from Bursa Malaysia which excluded off-market deals, the net amount withdrawn by foreign investors on the two trading days amounted to RM504.8 million, exceeding the RM438.4 million in the preceding week.

The following Monday, the first trading day after GE14, saw a net outflow of RM682.6 million, though the trading value on Bursa Malaysia was the highest ever recorded on the same day at RM7.3 billion.

Foreign selling on Tuesday then swelled to RM837.3 million, the largest in a day since early February this year.

Wednesday saw foreign outflows tapering to RM320.7 million, which MIDF attributed to positive investor reaction to post-GE14 reforms, including the zero-rating of the Goods and Services Tax effective June 1 and the pardon granted to jailed PKR de facto leader Datuk Seri Anwar Ibrahim.

The FTSE Bursa Malaysia KLCI (FBM KLCI) also settled 0.54% higher at an eight-day trading high of 1,858 points, as buying activities by retailers and local funds continued amid renewed optimism.

Foreign selling continued on Thursday and Friday at RM384.4 million and RM251.2 million respectively, as the surge in the US Treasury yields during the week weighed on the minds of investors.

As of last Friday, foreign investors have been net sellers for 10 straight trading days.

MIDF said due to intense selling pressure, the cumulative net inflow into Malaysia so far this year has been substantially reduced to RM40.2 million, from RM2.52 billion before GE14.

“We are cautiously optimistic that this cumulative figure may gradually pick up as more political clarity comes into the picture. Despite recording the largest weekly outflow among the four Asean markets we monitored last week, Malaysia is still the major beneficiary of foreign inflows,” it said.

Foreign average daily trade value (ADTV) rose by nearly 100% to RM2.39 billion, the highest in 24 weeks, while the ADTVs of the retail and institutional market reached a level not seen in 18 weeks.

The FBM KLCI registered a second weekly increase of 0.43%, ending at 1,855 points last Friday.

However, the ringgit suffered its seventh week of losses with a 0.57% depreciation to RM3.9722 against the US dollar last Friday.

CIMB Group Holdings Bhd recorded the highest net money inflow last week with RM41.21 million, while its share price fell 1.45% against the FBM KLCI.

Genting Malaysia Bhd posted the second-highest net money inflow of RM14.15 million, with its share price substantially outperforming the benchmark index at a 3.98% increase for the week.

In third place was Genting Bhd with a net money inflow of RM10.95 million and a 0.81% gain in share price.

For outflows, Felda Global Ventures Bhd saw the largest net money outflow of RM14.52 million for the past week, while its stock price gained by 13.66% against the key index.

Petronas Dagangan Bhd placed second, with a net money outflow of RM13.12 million last week and a 0.45% weekly loss in its share price.

IHH Healthcare Bhd recorded the third-largest net money outflow at RM12.16 million during the week under review, while its share price outperformed the benchmark with a 1.49% weekly gain.