KUALA LUMPUR – Foreign investors turned into net buyers in the last week of 2020, with net inflow amounting to RM8.6 million compared with the RM223.8 million net of local equities in the preceding week.
Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said Bursa Malaysia began the week on a rather positive note as international investors snapped up RM49.4 million net of local equities last Monday, supported by optimism sparked across markets after United States President Donald Trump finally signed a bill containing US$900 billion (RM3.6 trillion) in pandemic relief.
“Trump backing down from last-minute demands that undercut his own negotiating team risked a government shutdown and delayed much-needed economic aid as Covid-19 cases continue to rise in the US.”
The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) and ringgit followed suit to close 0.2% and 0.3% higher, respectively, last Monday.
For the full year, international investors sold RM24.6 billion net of local equities on Bursa. The last time foreign net selling was near such levels was in 2015, when offshore funds pulled out RM19.5 billion net of local equities.
In comparison with its Asian peers, Malaysia recorded the fourth-largest foreign net outflow in 2020, with South Korea seeing the largest foreign net outflow among seven Asian countries.
Meanwhile, India was the only country among the seven that saw an annual foreign net inflow, amounting to US$23.4 billion.
MIDF Amanah Investment Bank Bhd, in a research note, said Malaysia saw the smallest net inflow among Southeast Asian nations, with last week being the second net inflow from foreign investors since early November.
Cumulatively, foreign investors were net sellers with an outflow of RM726.97 million throughout December, lower than the outflow of some RM1.03 billion the previous month.
For the last week of December, retailers were active buyers every day of the week, except Monday.
“The largest net inflow was on Tuesday and smallest on Thursday, to the tune of RM104.66 million and RM44.06 million, respectively.
“It was the opposite for local institutions, as the market saw local institutions as net sellers every day except Thursday.”
The market sentiment was poor as New Year’s Eve approached. The FBM KLCI was swimming in a sea of red, with all its constituents recording daily declines, bucking the trend of regional peers such as China’s CSI 300 index, which gained nearly 2%.
Selling activity was prevalent in plantation companies due to the US’ ban on imports of palm oil produced by Sime Darby Plantation Bhd, dragging Bursa’s Plantation Index by 1.5%.
Meanwhile, Top Glove saw the largest net outflow at RM20.71 million last week, CIMB recorded the second-largest net outflow at RM1.87 million, and Genting registered the fourth-largest outflow at RM1.20 million. – Bernama, January 4, 2021
