Foreign investors dumped RM11.1b local equities in 2019

Peoples hanging in front of Bursa building during the Bursa Malaysia Financial Results announcment at Bursa Malaysia in Kuala Lumpur on JANUARY 29, 2014. Pic HAFZI MOHAMED

by SHAZNI ONG / pic by TMR FILE PIX

FOREIGN investors dumped RM11.14 billion worth of domestic equities in 2019, marginally lower than the RM11.69 billion sold the year before, as investors recovered somewhat from their “wait-and-see” approach, but maintained cautious sentiments.

Malaysia’s 2019 foreign fund outflow was also the largest among Asian markets, as per Bloomberg data.

The FTSE Bursa Malaysia KLCI (FBM KLCI) was the worst-performing gauge in the region for most of last year, marred by uncertainties in the aftermath of the 14th General Election in 2018 and subdued global growth.

“While the total foreign net outflow from Malaysia was little changed in 2019 and remained the largest among the Asean markets we monitor, this was no match for the massive foreign net selling of RM19.49 billion seen in 2015,” MIDF Amanah Investment Bank Bhd (MIDF Research) said in a report yesterday.

According to MIDF Research’s latest weekly fund flow report, the last trading day of 2019 witnessed an exodus of foreign funds amounting to RM196.2 million net, dragging the FBM KLCI by 1.7% to settle below the 1,600 mark at 1,588.8 points.

However, international funds returned to Bursa Malaysia when markets reopened last Thursday after the New Year break, acquiring RM14.9 million net of local equities.

“Offshore investors may have taken cue of Malaysia’s Manufacturing Purchasing Managers’ Index which edged up to 50 in December 2019, the first expansion since September 2018.

“International funds later upped the ante in buying activity to purchase RM167 million net of local equities last Friday, the largest daily foreign net inflow in more than two months. The local bourse followed suit to gain 0.6% to close at 1,611.4 points on the same day,” it said.

Foreign investors acquired RM28.6 million net of local equities during the holiday-shortened week compared to RM69.9 million net bought during the week prior.

Foreign funds experienced the largest gain in average daily traded value with a 59.6% increase, although this was still below the RM1 billion mark.