KUALA LUMPUR: Global funds took a breather from Malaysian stocks after two straight weeks of buying on the back drop of global geopolitical worries
MIDF Research said based on preliminary data from Bursa Malaysia which excluded off market deals, the net amount sold by foreign investors last week amounted to RM301.3 million net, the second largest weekly attrition so far this year.
Foreign net selling occurred on three out of five trading days last week, from Monday to Wednesday, the firm said in its weekly fund flow report today.
It said only RM40.3 million net of local equities were sold on Monday but selling activity gradually accelerated to RM207.7 million net on Wednesday, coinciding with the FBM KLCI’s largest daily loss during the week of 0.25 per cent.
“The main trigger for the heavy selling on Wednesday is the selloff in technology stocks on Wall Street overnight sparked by increased scrutiny over the technology sector whereby Chinese investments in the sector would be capped at a certain level,” it added.
MIDF Research said global investors had slowly returned to Malaysia on Thursday to a tune of RM39.2 million net aided by easing geopolitical tensions in the Korean peninsula after the two Koreas are set to have talks on April 27.
Friday’s foreign buying on Bursa declined to RM9.30 million net with regional peers, namely the Philippines and Indonesia closed for Good Friday.
MIDF Research said March saw a net outflow of RM61.6 million net, a big difference from the RM1.12 billion sold in the previous month.
Meanwhile, it said RM2.2 billion net of local equities were acquired by foreigners on Bursa in the first quarter of 2018, the only Southeast Asian market under its coverage with a net inflow.
Still, it said this was less than the RM5.74 billion accumulated in first quarter of 2017.
“We reckon that foreign flows may be muted leading up to the 14th General Election which looks set to be held within the next few months,” it said.
The firm said foreign participation had started to slowdown a bit as the foreign average daily trade value (ADTV) declined below the RM1 billion mark for the first time in 12 weeks to settle at RM934 million.
It said the retail market meanwhile was little changed with an ADTV of RM842 million.
During the week ended March 30, Tenaga Nasional Bhd registered the highest net money inflow of RM17.36 million, followed by F&N Holdings Bhd (RM16.06 million) and Axiata Group Bhd (RM7.19 million).