Bursa Malaysia continues decline, marking sixth week of losses

Bursa Malaysia continued its decline last week, marking the sixth week of losses last seen in May to June 2015. — Bernama pic
Bursa Malaysia continued its decline last week, marking the sixth week of losses last seen in May to June 2015. — Bernama pic

KUALA LUMPUR, Aug 19 — Bursa Malaysia continued its decline last week, marking the sixth week of losses last seen in May to June 2015, in line with performances of regional peers, said MIDF Amanah Investment Bank Bhd Research. 

In the weekly fund flow report today, its analyst Adam Mohamed Rahim said the level at which international funds were leaving Asian markets was still high, with provisional aggregate data for the seven Asian exchanges tracked saw foreign investors offloaded US$2.55 billion (RM10.63 billion) net last week.

“In emerging South-east Asian markets that we monitored, all markets were experiencing outflows for the week.

“Foreign investors in Bangkok upped their ante in selling activity to dispose of US$790.4 million net, Manila experienced a foreign net outflow of US$86.6 million net and offshore investors in Jakarta extended their foreign net selling activity for the fifth week running after selling off US$185.6 million worth of local equities,” he said.

For Malaysia, offshore investors continued to reduce their exposure in stocks listed on Bursa for the fifth week running albeit at a slower pace with foreign investors sold RM598.1 million net of local equities last week, he said.

As the local market only reopened on Tuesday due to Hari Raya Aidil Adha holiday, foreign investors according to Adam, took out RM209.6 million net of local equities amidst geopolitical turbulence from Argentina and Hong Kong.

“This was the highest foreign net outflow seen during the week, pulling the local bourse below 1,600 points to settle at 1,592.88 points on the same day, the lowest close since late August 2015,” he said.

The levels of foreign net selling receded later on Wednesday he said, as US President Trump delayed some tariffs on Chinese goods, spurring a relief rally around the world.

Chinese officials also signalled that trade talks would remain amid plans of a face-to-face trade meeting with Washington in September.

“The pace of foreign net selling, however, swelled to RM196.8 million net on Thursday due to concerns that the US economy might slip into recession following the inversion of the US treasury yield curve.

“But the foreign net selling activity later slowed down to RM118.1 million on Friday amid the announcement of Malaysia’s second-quarter 2019 Gross Domestic Product growth of 4.9 per cent which beat market expectations,” he said.

Adam said, global major equity markets worldwide remained in a sea of red last week as concerns from Argentina and Hong Kong sparked investors’ fears.

In contrast, he noted the ringgit appreciated by 0.1 per cent against the greenback as it settled at 4.1782 against the US dollar last week.

Brent crude oil price also recorded a marginal gain of 0.2 per cent of the week after settling at US$58.64 per barrel, he said.

The slight weekly advance was mainly attributable to the relief rally in US equities, spurred by the improved US bond yields, outweighing the Organisation of the Petroleum Exporting Countries (Opec) report.

The oil cartel cut its forecasts for oil demand growth in 2019 by 40,000 barrels to 1.10 million barrel-per-day due to expected pressure from a possible slowdown in economic growth, he added. — Bernama

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