KUALA LUMPUR, April 26 — Selling activity gained pace last week as foreign investors disposed of RM490.3 million net of local equities compared to RM235.2 million net in the week before, said Bank Islam Malaysia Bhd economist Adam Mohamed Rahim.
He noted that foreign investors started the week by dumping RM142.2 million net of local equities on Monday as Malaysia’s new daily COVID-19 cases continued to remain above 2,000 cases for the fifth consecutive day.
Other countries such as India were also struggling with rising COVID-19 cases to the extent of imposing a six-day lockdown in its capital region of Delhi.
“However, international funds entered Bursa Malaysia at a modest pace by acquiring RM27.5 million of local equities on Tuesday amid some bargain-hunting activity.
“The FBM KLCI index even bucked the regional trend to close 0.5 per cent higher at 1,600.3 points,” he told Bernama.
Notwithstanding, Adam said Tuesday’s foreign net inflow was wiped off as foreign investors dumped RM258.2 million of local equities on Wednesday.
The heavy sell-off was mainly attributable to the surge in COVID-19 cases worldwide, especially in countries like India, which reported its worst daily COVID-19 death toll on Tuesday, with large parts of the country now under lockdown which had led to concerns over the global economic trajectory this year.
“Besides, a new wave of coronavirus infections in Japan increased the likelihood that Tokyo, Osaka and surrounding areas will be put on lockdown.
“All in all, this has outweighed the recent optimism from vaccination rates in the United States, Britain, and European countries,” said Adam.
On Thursday, the momentum of foreign net selling on Bursa Malaysia slowed down to the tune of RM51.2 million.
Adam said the overall foreign net selling activity was cushioned by the interest in rubber glove counters under the index, namely Supermax, Top Glove and Hartalega, all of which gained by more than 3.0 per cent during that day.
The return of investors’ interest towards glove counters was due to a persistent rise in COVID-19 cases in many parts of the world.
Malaysia itself witnessed an uptick in cases that breached 2,000 cases on April 15, a level not seen since March 5, 2021.
As for other countries, India recorded the world’s highest daily tally of 314,835 COVID-19 infections last Thursday, as a second wave of the pandemic raised new fears about the ability of health services to cope.
Friday saw the level of foreign net selling rising slightly to RM66.3 million as other countries such as Thailand became the latest Asian nation to report an unprecedented daily surge in COVID-19 cases as the death toll climbs to a record in India.
“Investors were also shocked following news that US President Joe Biden will propose almost doubling the capital gains tax rate for wealthy individuals to 39.6 per cent to help pay for a raft of social spending.
“April appears to be another month of foreign net selling as foreign investors have so far sold RM757.6 million so far during the month,” said Adam
On a year-to-date basis, he noted that Malaysia has seen a foreign net outflow of RM2.5 billion.