KUALA LUMPUR: The selling activity by foreign investors on Bursa Malaysia gained pace last week with RM408.5 million net of local equities last week compared to RM237.2 million net sold in the preceding week.
MIDF Research analyst Adam M Rahim said the week started off on a sluggish tone as international funds offloaded RM129.3 million of local equities last Monday.
“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,” Adam said in MIDF Research’s weekly fund flow report today.
He said November had so far seen a foreign net outflow of RM594.0 million.
On a year-to-date basis, foreign funds had 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.
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.
Adam said the foreign net outflow had slowed down to RM12.9 million on Tuesday as investors awaited a speech by President Donald Trump on US trade policy and news that he would 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 President Trump hinted that existing tariffs on China will be raised if no deal is made,” he added.
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.
“China’s industrial output rose by 4.7 per cent year-on-year (YoY), which was below estimates of 5.4 per cent while fixed asset investment grew at the slowest pace in data dating back to 1998,” he said.
Offshore investors marked their sixth straight day of selling after RM57.0 million net of local equities were sold.
Risk-on mood was tempered by Malaysia’s third-quarter of 2019 gross domestic product growth of 4.4 per cent year-on-year, which was the weakest in a year.