Foreign investors acquire RM223.8 mil net of local equities

KUALA LUMPUR – Foreign investors turned into net buyers during the holiday shortened week of December 21-24, acquiring RM223.8 million net of local equities compared to RM178.8 million sold in the whole of the preceding week.

Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said the local bourse started the week with a measurable pace of foreign net outflow as international investors disposed of only RM32 million net of local equities last Monday.

“Jitters surrounding lockdowns in various parts of the world sapped sentiment last Monday, starting with the possible expansion of a lockdown in Thailand, as health authorities searched for more than 10,000 people in connection with a record cluster of Covid-19 cases found in a coastal province near Bangkok.

“Beyond Asia, a lockdown came into force yesterday in London and southeast England in an attempt to control the fast-spreading new Covid-19 strain,” he said.

Adam said international investors upped the ante in selling activity last Tuesday, selling RM68.6 million net of local equities, as the new strain of Covid-19 found in the United Kingdom conquered the overall market sentiment.

Additionally, Taiwan had reported its first locally transmitted case of Covid-19 after over eight months; ending what was the world’s longest stretch without a domestic infection.

Adam said investors had also shrugged off news of the passing of the second biggest economic rescue package in the United States history, after months of discord between Democrats and Republicans.

On Wednesday, offshore investors turned net buyers, accumulating local equities worth RM265.1 million net – the highest recorded foreign net inflow in a day so far this year.

“Perhaps investors decided to do some bargain hunting before Christmas eve, which pushed the FBM KLCI index 1.0% higher to settle at 1,647.5 points after four consecutive days of losses.

“Fears over the new Covid-19 strain, which emerged in the UK led to some countries, such as South Korea and the Philippines, to temporarily suspend flights from the UK, adding more downward pressure to the aviation industry, which is already in distress,” Adam said.

Meanwhile, foreign net buying continued on Thursday, albeit at a smaller quantum of RM59.3 million ahead of the long weekend.

The buying activity on Thursday was likely supported by news that Brexit negotiators had reached an outline of a post-Brexit trade deal.

On the domestic front, investors’ sentiment was boosted by the Malaysian government’s plan to secure an additional 6.4 million doses of the Covid-19 vaccine from AstraZeneca via the global Covax facility, while being in talks with Pfizer at the same time to boost its vaccine purchases.

“To-date, international investors have sold equities worth RM24.6 billion net this year.

“In terms of participation this week, foreign investors took a breather amid the festive season, as the average daily trading value dropped below the RM1.0 billion mark at RM894.4 million,” Adam said.

He added that among Sean peers, Malaysia remains as the nation with the second largest year-to-date foreign outflow after Thailand. – Bernama, December 28, 2020