KUALA LUMPUR, Aug 9 — Foreign investors withdrew RM451.1 million net of local equities last week compared with RM579.6 million net disposed of in the previous week.
Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said foreign investors started the week by selling RM82.9 million net of local equities on Monday as jitters from the highly infectious Delta variant frayed investors’ nerves.
“The pace of foreign net selling gained pace on Tuesday with international funds disposing of RM118 million net of local equities, as there seemed to be no signs of slowdown in the number of daily COVID-19 cases in Malaysia, despite the commendable vaccination rates, which have hovered around 500,000 jabs per day on average,” he told Bernama.
Offshore investors continued to sell on Wednesday, albeit at a much slower momentum of RM79.6 million net despite the high number of COVID-19 cases in the country, while investors continued to digest the political developments in the country.
Adam said the foreign net outflow slowed down further on Thursday to RM36.8 million net.
“In fact, the FBM KLCI index rebounded 0.3 percent to 1,495.8 points.
“On further scrutiny, the FBM KLCI bucked the regional trend as most of its Asian peers such as Thailand, South Korea, and the Philippines were in the red amid hawkish comments by the US Federal Reserve, citing that it may taper the asset purchasing program soon,” he noted.
He said the daily gains also occurred despite COVID-19 cases reaching another record high on Thursday as investors were probably bargain-hunting.
However, foreign net selling activity spiked to RM133.8 million net on Friday due to concerns over the Delta variant which may dent economic recovery prospects, thus dampening investor sentiment during the day.
The global number of COVID-19 cases has surpassed 200 million cases according to the World Health Organisation (WHO).
“Moreover, China has imposed mobility restrictions to curb the spread of the Delta variant, including the cancellation of flights and train services,” he said.
Domestically, he said the number of daily COVID-19 cases in the country recorded another record high of 20,889 cases on Friday.
On a year-to-date basis, foreign investors have sold RM6 billion net of local equities compared to RM19.7 billion net withdrawn during the same time frame last year.
“On Sunday, Prime Minister Tan Sri Muhyiddin Yassin announced the long-awaited reopening of economic and social sectors.
“With that, such news could perhaps provide some good sentiment to the local market, which has been bearish as of late amid a confluence of factors, mainly due to the surge in COVID-19 cases in the country,” he said.