Saturday, October 31

Foreign investors continue sale of equities for fifth week

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KUCHING: For the fifth week running, foreign funds disposed equities listed on Bursa Malaysia which represents the longest selling binge so far this year during the holiday-shortened week.

Last week, foreign investors sold RM71.4 million which was higher than the RM54.2 million recorded in the preceding week.

MIDF Amanah Investment Bank Bhd (MIDF Research) said these estimates made were based on transactions in the open market which excluded off market deals.

“During the four-day trading week, foreign selling occurred on each day,” it detailled in a note yesterday.

“Tuesday recorded the highest attrition for the week which amounted to RM29.1 million as investors shifted to the sidelines to seek cover before the Deepavali holiday on Wednesday.

“As the foreign net outflow persisted until Friday, the FBM KLCI took cue, resuming its gradual descent to end the week at 1,741 points – the lowest since April 20 after starting the week at a closing level of 1,754 points.”

The research firm said it seems that the local market is showing a muted response while markets elsewhere are showing a bullish trend amid global developments such as US President Donald Trump’s tax reform progress, commendable earnings on Wall Street and upbeat Chinese economic data.

“We note that although the foreign selling in Malaysia was in conformity with its Southeast Asian peers, the benchmark index in the respective peers tend to be more resilient as compared to Malaysia.”

It observed that cumulative net foreign inflow into shares listed on Bursa as of last week currently stands at RM9.40 billion. Nevertheless, the cumulative amount still offsets approximately 30 per cent of the total net outflows recorded in the past three years.

Foreign participation rebounded strongly as the foreign average daily trade value (ADTV) surged by a staggering 60 per cent to reach above the RM1 billion level at RM1.27 billion, the third highest weekly amount for the year.

On the other hand, the retail market was somewhat muted as the retail ADTV was slightly unchanged, only declining by 0.04 per cent to RM995.3 million.

Meanwhile, the top money inflows last week was dominated by Hartalega Holdings Bhd with RM16.25 million. This is followed by Malaysia Airports Holding Bhd at RM13.31 million and IOI Corp Bhd at RM10.51 million.

Looking at top money outflows, Petronas Chemicals saw the largest net money outfl ow of RM23.03 million last week. Hong Leong Bank recorded the second largest net money outflow of RM13.61 million, while Tenaga Nasional Bhd registered the third largest net money outfl ow at RM11.99 million.