The momentum of selling activity by foreign investors on Bursa Malaysia gained pace, analysts observed in the latest fund flow report, with foreign investors taking out RM408.5 million net of local equities. — Reuters photo
KUCHING: The momentum of selling activity by foreign investors on Bursa Malaysia gained pace, analysts observed in the latest fund flow report, with foreign investors taking out RM408.5 million net of local equities.
According to the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research), based on data from Bursa, foreign investors took out RM408.5 million net of local equities last week compared to RM237.2 million net sold in the preceding week.
“The week started off on a sluggish tone as international funds offloaded RM129.3 million of local equities on Monday,” MIDF Research said.
“Selling activity was triggered by violent protests in Hong Kong which caused the Hang Seng index to face its fourth biggest drop of the year.”
MIDF Research highlighted that the foreign net outflow slowed down to RM12.9 million on Tuesday as investors awaited a speech by President Donald Trump on US trade policy and news he will likely delay a decision on whether to slap tariffs on European autos.
“International funds were then back on their feet to dump RM141.2 million net on Wednesday, causing the local stock barometer to face its largest decline since early September 2019.
“Shock waves were sent throughout the market as Trump hinted that existing tariffs on China will be raised if no deal is made.”
The research arm further highlighted that foreign investors later sold RM68.2 million net as weak Chinese economic data showed the need for a phase one trade deal with the US to restore business confidence.
It noted that China’s industrial output rose by 4.7 per cent year on year (y-o-y) which were below estimates of 5.4 per cent while fixed asset investment grew at the slowest pace in data dating back to 1998.
“Offshore investors marked their sixth straight day of selling after RM57 million net of local equities were sold. Risk-on mood was tempered by Malaysia’s third quarter of 2019 (3Q19) gross domestic product (GDP) growth of 4.4 per cent y-o-y which was the weakest in a year.
“The month of November has so far seen a foreign net outflow of RM594 million. Meanwhile on
a year-to-date basis, foreign funds have taken out RM8.98 billion of local equities from Malaysia, making up 76.8 per cent of last year’s total foreign outflow of RM11.69 billion.”
MIDF Research noted that in terms of participation, foreign investors saw a decline in average daily traded value (ADTV) of 13.6 per cent to reach below RM1 billion at RM881.5 million.
Overall, Petronas Dagangan Bhd registered the highest net money inflow of RM15.16 million last week, followed by Tenaga Nasional Bhd with the second highest net money inflow of RM6.63 million.
Sunway REIT saw the third highest net money inflow of RM4.36 million.
On outflows, Hong Leong Bank Bhd saw the largest net money outflow of RM10.6 million last week.
Dialog Group Bhd recorded the second largest net money outflow RM9.54 million during the week under review while IHH Healthcare Bhd registered the third largest net money outflow of RM5.82 million.