June 15, 2024

New Malaysia Times

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Foreign investors on selling mode last week


KUALA LUMPUR, May 10 — Foreign investors were on selling mode on Bursa Malaysia last week, albeit at a slower pace of RM336.4 million net of local equities compared to the RM376.5 million in the preceding week, said Bank Islam Malaysia Bhd economist Adam Mohamed Rahim.

He said the local bourse started the week on a rough note as foreign funds decided to take out RM153.2 million net of local equities on Monday on concerns over the Movement Control Order (MCO) potentially dominating the market, as it could impact the nation’s economic growth trajectory.

The momentum for foreign net selling activities slowed down substantially to RM1.4 million on Tuesday, with investors looking for signs of recovery from the COVID-19 pandemic as major economies around the world reopened, noted Adam. 


“Nevertheless, international investors were back on their feet to withdraw RM155.4 million net of local equities on Wednesday after digesting the government’s announcement to re-enforce of the MCO across Selangor’s six districts, including Hulu Langat and Petaling from May 6 to May 17 to curb rising infections in the state,” he told Bernama.

 On Wednesday, after the markets closed, the movement restriction was expanded to include Johor Bahru, as well as Kuala Lumpur, starting Friday.

Adam said foreign net selling continued on Thursday but at a moderate pace of RM38.3 million, as investors took cue on commodity prices, which were near multi-year highs, causing them to switch to cyclicals amid hopes of a strong economic recovery.

“Investors were back in buying mode on Friday as they snapped up RM11.9 million net of local equities, snapping the seven-day foreign net selling streak on Bursa Malaysia. Bargain-hunting occurred mainly in rubber glove counters amid the resurgence of COVID-19 cases across the globe,” he added. 

The rise in crude palm oil price also led to some buying interest in plantation counters such as Sime Darby Plantation, making it one of the biggest gainers among KLCI constituents, he added.

On a year-to-date basis, Malaysia has seen a foreign net outflow of RM3.2 billion in 2021.

Meanwhile, MIDF Research said cumulatively since the beginning of 2021, retailers have been the only net buyers of Malaysia’s equity market to the tune of RM6.33 billion with local institutions and foreign investors were net sellers with outflows of -RM3.13 billion and -RM3.21 billion, respectively.

In terms of participation, the retail investors recorded a weekly decrease of -10.23 per cent, while local institutions, and foreign investors recorded a weekly increase of +13.77 per cent and +24.08 per cent, respectively, in average daily trade value.