KUALA LUMPUR – Foreign funds have offloaded RM558.4 million net of local equities on Bursa Malaysia between September 14 and 19 against RM71.2 million net acquired during the previous period of September 7 to 12.
Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said Bursa Malaysia’s international investors began the week by withdrawing -RM187.9 million net of local equities.
The local bourse, however, was up by 0.4%, supported by net buying activity by retail investors who scooped up RM280.3 million of local equities as they weighed prospects for a Covid-19 vaccine.
AstraZeneca disclosed that it has resumed British clinical trials of its Covid-19 vaccine that were suspended after a test patient fell ill.
Meanwhile, he said China state news outlets reported that “hundreds of thousands” of mainland residents have been given effective Covid-19 vaccines, without related adverse effects.
Foreign net selling activity inched higher to -RM223.0 million on Tuesday ahead of the Malaysia Day public holiday.
This was even after Beijing released its August industrial output and retail sales figures, which rose 5.6% and 0.5%, respectively, from a year earlier, confirming that economic recovery is underway.
Notwithstanding, retail investors and local institutions mopped up RM153.6 million and RM69.3 million, respectively, on Tuesday, pushing the FBM KLCI index 1.3 per cent higher to 1,531.3 points, the highest close in more than two weeks.
“Buying interest was probably focused on the banking sector as it is seen to be more stable in the long run, especially when the full-fledged moratorium will only be on a targeted basis starting on October 1.
“As such, it was no surprise that the Bursa Malaysia Finance Index increased by 2.1%, the largest gainer among other sectors,” Adam said.
As Bursa Malaysia reopened from the public holiday on Thursday, the foreign net selling slowed down to -RM84.6 million net.
The bourse’s foreign net outflow on Thursday was in conformity with other regional peers, namely South Korea, Taiwan, Thailand, Indonesia, and the Philippines after the US Federal Reserve said it would keep interest rates low in the coming years but failed to come up with further stimulus measures.
On the corporate front, Adam said Top Glove’s best ever quarterly net profit of RM1.29 billion for the fourth quarter of financial year 2020 spurred some profit-taking activity which caused its share price to drop by 7.6%.
The FBM KLCI index followed suit to close 1.2% lower at 1,513.1 points on Thursday.
The momentum of foreign net selling further decelerated to -RM63.0 million on Friday, tracking the positive data from the US labour market which showed that jobless claims dropped by 33,000 to 860,000 in the preceding week.
Apart from that, the movement of crude palm oil futures which went above RM3,000 per tonne on Friday was another catalyst for foreign investors to reduce their selling activity.
On a year-to-date basis, foreign funds have taken out -RM21.41 billion net of local equities, exceeding the -RM19.49 billion foreign net outflow in 2015.
Malaysia has the third smallest foreign net outflow on a year-to-date basis compared with its Asian peers, namely South Korea, Taiwan, Thailand, Indonesia, and the Philippines.
South Korea and Taiwan have the largest year-to-date foreign net outflow of over -US$20 billion each. – Bernama, September 21, 2020
