Foreign investors offload RM477.7 mln equity last week

0

KUCHING: After three consecutive weeks of foreign inflows, global investors took a breather as they cleared positions ahead of the long weekend.

Based on preliminary data from Bursa which excluded off-market trades, foreign investors offloaded RM477.7 million net last week, wiping off last week’s inflow of RM345.1 million net.

The team at MIDF Amanah Investment Bank Bhd (MIDF Research) said it was the first time foreign investors sold more than RM400 million for this year, making it the largest withdrawal so far.

“The last time foreign selling reached such levels was back in end of December 2016,” it recapped in its weekly fund flow report yesterday.

“International investors were net sellers on three out of four trading days last week. Wednesday recorded the highest outflow in a day since June 30 which amounted to RM221 million.

“On the same day, the FBM KLCI slid 0.17 per cent to close at 1,773 points, mainly dragged by CIMB which had its Japanese shareholder, Mitsubishi UFJ Financial Group selling its entire stake through an overnight block trade.”

MIDF Research said Bursa’s weekly outflow was in conformity with those seen by South East Asian peers notably, Thailand and Indonesia.

Foreign tide continued to leave Asia for the ninth consecutive week. Based on provisional aggregate data from the seven Asian exchanges tracked by the firm, investors classified as “foreign” offloaded US$1.3 billion net, more than triple the amount recorded in the week before which was US$400.2 million.

“Despite the renewed flare-up between the US and North Korea, foreign funds still snapped up US$127.9 million net in Korea after three straight weeks of hesitation,” MIDF Research observed.

“Investors in Korea seem to be focusing more on their own president’s plan to uphold the domestic economy.

“However, the spillover effect of the brawl between the communist regime and the world super power saw daily foreign purchases tapering to US$27.7 million on Friday, coinciding with the KOSPI index hitting the lowest point of the week the same day at 2,388 points.

“Meanwhile, the Korean won was also affected by reports of North Korea to consider a hydrogen bomb test in the Pacific, hitting a 24-day low at 1,136 won per US dollar on Friday.

Coming back to Bursa following last week’s massive outflow, the cumulative net inflow thus far this year into shares listed on Bursa went below RM11 billion to RM10.6 billion. Nonetheless, outflows have only been recorded in nine out of 38 weeks this which is a safe level.

Foreign participation rate dipped last week amid the surge in outflows. The foreign average daily trade value (ADTV) declined by a staggering 24 per cent to retreat below the RM1 billion mark to settle at RM861 million.

“In contrast, retail participation remained healthy for the week. The retail ADTV increased by seven per cent from RM940 million to breach the RM1 billion mark for the first time in 17 weeks.”