Foreign selling of Malaysian equities modest at RM86m

For the Bursa Malaysia trading week (October 12-15), foreign investors were seen in a cautious mode, with the overall tone staying mixed. — Bernama pic
For the Bursa Malaysia trading week (October 12-15), foreign investors were seen in a cautious mode, with the overall tone staying mixed. — Bernama pic

KUALA LUMPUR, Oct 18 — Foreign selling of local equities on Bursa Malaysia from last Monday to Thursday remained modest at RM86.0 million net compared with RM27.8 million for the whole of the preceding week.

Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said this brings the year-to-date foreign net outflow from Malaysia to RM22.42 billion.

In terms of participation, he viewed the average daily traded value (ADTV) on a four-day basis (Monday-Thursday) of foreign investors on Bursa Malaysia remained commendable at RM1.4 billion.

“It is worthwhile to note that the ADTV of foreign investors has stayed above the RM1.0 billion mark for the past 16 consecutive weeks.

“This indicates that international investors are still actively trading on Bursa Malaysia despite the lingering political jitters,” he told Bernama.

For the trading week (October 12-15), he said foreign investors were trading in a cautious mode, with the overall tone staying mixed. Foreign investors turned net buyers on Monday and Tuesday and net sellers on Wednesday and Thursday.

Adam said Bursa Malaysia started the week on the right foot on Monday as international investors snapped up RM39.0 million net of local equities but the local bourse was down by 11.9 per cent amid some profit-taking ahead of Opposition leader Datuk Seri Anwar Ibrahim’s audience with the Yang di-Pertuan Agong, Al-Sultan Abdullah Ri'ayatuddin Al-Mustafa Billah Shah on Tuesday.

“Another contributing factor to the slump in the local market was the announcement of the Conditional Movement Control Order (CMCO) for Selangor, Putrajaya, Kuala Lumpur and Sabah by the government on Monday to curb Covid-19,” he noted.

He said international funds remained net buyers on Tuesday albeit at a slower pace of RM10.0 million net.

The political jitters amid the outcome of Anwar’s audience with the Yang di-Pertuan Agong was partially offset by news that China pledged to buy 1.7 million tonnes of Malaysian palm oil until 2021, said Adam.

“Therefore, majority of plantation counters such as IOI Corporation and Kuala Kepong ended in the green zone on Tuesday,” he added.

He said offshore investors took a break from acquiring Malaysian equities and instead sold RM87.0 million net of equities on Wednesday, snapping the four-day buying spree, with much of the negativity coming from the deadlock in the US stimulus talks.

He said foreign net selling slowed down to RM48.0 million on Thursday with sentiment towards glove makers turning sour following the move by the US Department of Labour to put Malaysian-made rubber products on the list of products that allegedly used child or forced labour.

“In addition, tensions between the US and China escalated further as US President Donald Trump was considering to include China’s Ant Group into a trade blacklist before the company plans to go for a dual listing in Shanghai and Hong Kong,” he added. — Bernama

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