Foreign funds net sellers of RM499.3m local equities last week

Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said Bursa Malaysia had a rough start to the week as international investors dumped RM126.7 million net of local equities on Monday. — Bernama pic
Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said Bursa Malaysia had a rough start to the week as international investors dumped RM126.7 million net of local equities on Monday. — Bernama pic

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KUALA LUMPUR, July 5 — Foreign investors withdrew a net sum of RM499.3 million from the local equity market last week, up from a disposal of RM469.5 million net of equities in the preceding week.

Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said Bursa Malaysia had a rough start to the week as international investors dumped RM126.7 million net of local equities on Monday.

He said the sentiment on Monday was dampened by the extension of the current movement restrictions beyond June 28.

“Aside from that, Malaysia’s latest exports data for May 2021, which grew by 47.3 per cent year-on-year, did not provide an impetus for the market,” he told Bernama.

He noted that the pace of foreign net selling took a breather on Tuesday as foreign funds only sold RM55.8 million net of local equities as the National People’s Well-Being and Economic Recovery Package (PEMULIH) package served as a cushion from further selling activity.

Interestingly, Adam said, the comeback of the repayment moratorium did not cause a huge sell-off in banks today as it would be done via an opt-in method.

“International investors upped the ante in their selling activity to take out RM206.0 million net of local equities on Wednesday, which was the last trading day of June,” he said.

Hence, the month of June recorded a total foreign net outflow of RM1.2 billion compared to RM3.0 billion net during the same month last year, said Adam.

Likewise, he said, the FTSE Bursa Malaysia KLCI (FBM KLCI) settled at 1,532.63 points on Wednesday, the lowest close in nearly eight months.

“Thursday saw a foreign net outflow of RM82.1 million net as investors moved to the sidelines ahead of two major events,” he said.

According to Adam, with investors probably focusing on the positive side whereby they expected that the Organisation of the Petroleum Exporting Countries (Opec) meeting scheduled for Thursday to likely be able to balance between supply and demand, the Bursa Malaysia Energy Index was the biggest gainer during the day at 2.4 per cent.

“The second event was the United States jobs report for the month of June whereby any improvement would serve as proof that the country’s economy was recovering better,” he said.

The momentum of selling activity by investors slowed down further to RM28.7 million net on Friday despite the government’s move to impose an Enhanced movement control order in several parts of Selangor and Kuala Lumpur from July 3-16.

On a year-to-date basis, he said, foreign investors had sold RM4.3 billion so far in 2021 compared to the RM16.5 million disposed during the same period last year. — Bernama

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