Foreign investors sell on tensions from North Korea

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KUCHING: Foreign investors continued pulling out from Malaysia albeit at a slower momentum last week.

Based on preliminary data by Bursa Malaysia, the amount sold was RM205.5 million which was the second highest out of the only five weeks that net sale had been recorded this year. This is estimated based on transactions in the open market and excluded off market deals.

MIDF Amanah Investment Bank Bhd (MIDF Research) observed that the heaviest foreign selling during the week was recorded on Tuesday with net disposals reaching RM139.2 million net as geopolitical tensions heightened on the back of the ICBM test by North Korea.

“We note that the markets in Indonesia, Thailand and the Philippines were also the casualties of foreign attrition on Tuesday,” it added in a report yesterday.

Last week’s foreign withdrawal reduced the cumulative year-to-date net inflow to below the RM10 billion mark to rest at RM9.96 billion.

Notwithstanding this, MIDF Research said the year-to-date inflow into Malaysia still offsets approximately 30 per cent of the total outf ows in 2014 to 2016.

“Foreign participation eased last week, as its average daily trade value (ADTV) declined by 36 per cent for the week, from RM1.24 billion to RM792.2 million. Indeed, foreign daily trade value during the week only ranged from RM710 million to RM820 million compared to above RM1 billion before.

“In contrast, the retail market continued to slow down with its ADTV slightly unchanged at RM627.5 million, below RM800 million level for the third consecutive week.”

Malayan Banking Bhd’s stocks were the beneficiary of the highest net money inflow of RM39.59 million. The second highest net money inflow beneficiary was KL Kepong Bhd, amounting to RM13.95 million.    Meanwhile, Maxis Bhd saw the third highest net money inflow of RM10.49 million. This came after the company announced that its 3G radio access network sharing and alliance agreement (NSA) with U Mobile was terminated as it contributed less than three per cent of revenue in 2016.

On the other end of the spectrum, Public Bank Bhd saw the largest net money outflow of RM16.41 million last week, followed by CIMB Group Holdings Bhd in second place with RM11.86 million outflow and Sime Darby Bhd in third with a net money outflow at RM10.50 million.