KUALA LUMPUR: The net amount of local stocks offloaded by foreign investors in Bursa Malaysia stood above the RM1 billion level for the fifth time this year at RM1.89 billion last week, MIDF Research said.
The firm expects the trend to continue amid concerns due to the US-China trade friction in particular.
MIDF Research said offshore investors had been withdrawing Malaysian equities for 33 consecutive days since May 2, surpassing the 29-day selling streak recorded in early January to mid-February 2014.
Foreign selling was seen at RM444.0 million on the same day as the trade friction between Beijing and Washington continued to be the biggest worry among investors, it added.
“We reckon that these external developments would continue to affect the pace of flows into and out of Malaysia,” MIDF Research said in its weekly fund flow report.
It noted that stocks listed on Bursa had been subjected to foreign selling for the past eight uninterrupted weeks.
Foreign participation remained active despite the 23 per cent decline in foreign average daily trade value (ADTV) as the value stood above RM1 billion for the 12th week running.
“Although the retail ADTV was below RM1 billion for the second week at RM865 million, retailers have been entering the market for the past six consecutive weeks,” it added.
MIDF Research said global funds had sold the most on Tuesday at RM555.0 million net, coinciding with the FBM KLCI’s largest drop in 13 trading days at 1.61 per cent as the US-China trade friction intensified.
“Selling activity thereafter tapered below the RM400 million level on Wednesday and Thursday at –RM384.0 million and RM264.9 million net, respectively,” it added.
Among the top net money inflows were Darby Plantation Bhd, Public Bank Bhd and Petronas Chemicals Bhd, which registered RM17.89 million, RM16.84 million and RM13.78 million respectively.
The top net money outflow included British American Tobacco Malaysia Bhd, MY EG Services Bhd and IOI Corp Bhd, registering RM11.95 million, RM11.29 million and RM2.90 million respectively.
The FBM KLCI moved in an opposite direction to slide further to the lowest close since February 2017 at 1,692 points on Thursday and marked its ninth straight day of losses as Telekom Malaysia Bhd led decliners, dropping as much as 12 per cent amid worries over a slash in broadband prices.
Globally, MIDF Research said major equity markets worldwide were mostly swimming in the red last week after a frenetic week dominated by intensified trade tensions.
“Wall Street started the week on the wrong foot as a household goods companies suffered some of the worst losses on the S&P500 index which fell for the third time in four days,” it added.
Later that Monday, President Trump ordered the US Trade Representative to identify US$200 billion in goods for a potential 10 per cent tax for China and noted that another US$200 billion in tariffs will be imposed if China retaliated.
Meanwhile in Europe, UK Prime Minister Theresa May claimed victory for a crucial parliamentary vote on Tuesday, allowing her government to offer lawmakers a take-it-or-leave-it decision on any final Brexit deal.
Two days later, the Bank of England kept interest rates at 0.5 per cent but moved closer to a possible hike after Andy Haldane joined the pact favouring a hike, marking the biggest split vote in the monetary policy committee since June 2017.
Brent crude oil price advanced 2.87 per cent to US$75.55 per barrel last week, the biggest weekly increase in six weeks. It was on a downward trend from Tuesday to Thursday before surging 3.42 per cent on Friday as traders welcomed the Organisation of the Petroleum Exporting Countries’ decision to moderately increase output despite the absence of any clear target.
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