Foreign attrition on Bursa Malaysia enters 10th week


Foreign investors continued to reduce their holdings in the Malaysian equity market, marking the 10th consecutive week of selling streak, the longest since September 2015.

MIDF Amanah Investment Bank Bhd (MIDF Research) in its weekly fund-flow report stated that foreign funds sold RM704.3 million net in equity last week, compared to net sales of RM705.4 million the week before.

MIDF Research analyst Adam M Rahim said this has brought cumulative outflow thus far this year to RM7.53 billion, which offsets 75% of last year’s total foreign inflow of RM10.33 billion.

“It is the longest weekly selling streak recorded since the 20-week selling spree in May to September of 2015.”

Adam said foreign investors were net sellers on every single day of last week.

“Last Monday to Thursday’s selling by overseas investors was rather contained, only ranging from RM45 million to RM100 million.

“During this period of modest selling activity, the highest daily outflow of RM100.4 million occurred last Tuesday, coinciding with the FTSE Bursa Malaysia KLCI’s lowest closing point of 1,680 points within the same period,” he added.

Last Friday, foreign selling surged to RM393.6 million, the highest in a day since June 21, along with regional peers South Korea and the Philippines.

The major sell-off was due to the US-China trade dispute after the US officially activated a 25% tariff on US$34 billion (RM136.99 billion) Chinese goods, which was followed by an immediate tit-for-tat measure by the Chinese government.

According to MIDF Research, Malaysia still holds the second-lowest outflow among the four Asean markets that the research firm monitors, after the Philippines, on a year-to-date basis.

Notably, foreign average daily traded value declined 26% to under RM1 billion, Adam highlighted.

“The retail market, however, remained healthy with an ave- rage daily trade value of RM807.7 million,” he said.

The top three counters with the highest money inflows were Tenaga Nasional Bhd, Public Bank Bhd and Genting Malaysia Bhd.

Malayan Banking Bhd, MyEG Services Bhd and Top Glove Corp Bhd were the counters that led the outflow.

On the global front, equity markets ended mixed last week as global trade tensions took centre stage.

MIDF Research said foreign tide continued to leave Asia for the fourth-week running.

“Based on the provisional aggregate data for the seven Asian exchanges that we track, investors classified as ‘foreign’ sold US$1.45 billion net last week, just around US$200 million lower compared to the amount disposed in the preceding week.”