KUCHING: Analysts at MIDF Amanah Investment Bank Bhd (MIDF Research) saw cumulative outflow for June 2015 exceeded RM3 billion at RM3.15 billion, representing the biggest monthly outflow since January 2014.
For 2015, last week’s selldown increased the cumulative net foreign outflow to RM9 billion, significantly surpassing the RM6.9 billion outflow for the entire 2014.
The research house added that foreign participation rose to a ‘moderate-high’ level with daily volume for the week averaging RM962 million.
However, there was a significant drop in volume on Friday, understandably so ahead of the referendum in Greece.
Local institutions mopped up RM470.8 million in the open market last week on active participation rate of RM2.13 billion. Local funds have mopped up RM10.4 billion this year, compared with RM8.2 billion in 2014.
“We wrote last week that the month of July has historically been benign for the local stock market. The Greece ‘NO’ vote means uncertainties ahead and there will likely be a global selloff in equities in the immediate term. However, the Greece outcome should have been expected and priced in.
“The local market is likely to be weighed down by global sentiment. However, there are reasons to expect the market to be resilient.”
Mirroring markets elsewhere in the region, Bursa Malaysia observed a marginal net change in foreign investment in stocks listed on the exchange.
MIDF Research said despite the upgrade in rating outlook by Fitch, foreign selling persisted on Bursa.
Foreign investors have now been net sellers on Bursa for ten consecutive weeks noted the research house. It has been the longest stretch of foreign withdrawal since the exodus during the last three months of 2013.
“Last week, foreign investors sold equity listed in the open market on Bursa amounted to RM314.9 million on a net basis. However, that was a significant drop from the RM824.7 million sold the week before.
“Selling continued on Wednesday, albeit marginally, the day after Fitch upgraded Malaysia’s rating outlook from negative to stable. However, foreign selling appears to be ebbing again, after the surge in outflow in the preceding week,” said the research house.