KUALA LUMPUR – Foreign investors withdrew RM574.3 million net of local equities from Monday to Friday last week, slightly lower than the RM615.4 million offloaded the whole of the week before.
Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said Bursa Malaysia experienced Monday blues last week as international investors sold RM157.5 million net of local equities.
“Investors appeared anxious as the United States was considering sanctioning at least a dozen more Chinese officials over their actions in the recent disqualification of Hong Kong legislators.
“Such news out-shadowed positive economic data whereby China’s exports jumped the most in November since early 2018, pushing its trade surplus to a monthly record high and underlining how global demand for pandemic-related goods is supporting a growth rebound in the economy,” he said.
Adam said the level of foreign net selling declined to just RM31.7 million on Tuesday amid an increasing interest in rubber glove counters following the spread of Covid-19 infections globally, and a series of delays in a new US fiscal package bill.
Nevertheless, the momentum of foreign net selling accelerated to RM178.9 million on Wednesday despite signs of progress in discussions over a new US fiscal package.
“While investors were reducing their exposure on local equities on Wednesday, a net inflow was observed under retail investors, who accumulated RM268.3 million of local equities.
“Interestingly, the banking counters such as Public Bank, which announced a bonus issue on Tuesday led gainers on the FBM KLCI on Wednesday followed by other banks such as Hong Leong Bank and RHB Bank," he noted.
In addition, Thursday saw the level foreign net outflows remain high at RM160.8 million amid dimming prospects for more US fiscal stimulus and after a slump in tech stocks overnight.
China also said it will sanction more US officials and place new travel restrictions on American diplomats in retaliation for measures taken by the Trump administration over Hong Kong.
"The risk-off mood appeared lower on Friday as foreign net selling dipped to RM45.4 million as banking stocks continued to provide support to the local bourse, which closed at an 18-month high of 1,684.6 points.
"The interest in banking counters comes about as investors are anticipating an economic recovery next year while an unchanged Overnight Policy Rate (OPR) in 2021 could also mean better net interest margins for banks," he added.
In terms of participation for foreign investors, the average daily traded value from Monday to Friday stood at RM2.7 billion.
On a year-to-date basis, foreign investors have taken out RM24.7 billion net of local equities in 2020.
Malaysia remains the nation with the second largest year-to-date foreign outflows after Thailand among Asean peers.– Bernama, December 14, 2020
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