By Niat Seet Wei & Siti Noor Afeera Abu
KUALA LUMPUR, Sept 22 (Bernama) -- International investors turned net sellers on Bursa Malaysia last week, offloaded RM79.4 million worth of local equities between Sept 17 to 19, in contrast with the RM247.1 million of foreign net buying registered for the same period the week before.
MIDF Amanah Investment Bank Bhd Research (MIDF Research) analyst Adam M Rahim said the selling had brought the year-to-date (as at Sept 19) foreign net outflow from Malaysia to stay above RM7.0 billion.
"International funds mopped up RM58.7 million net on Tuesday after the market reopened from the long weekend.
"This is despite increasing concern over a slower global growth due to the recent attacks on Saudi Arabian oil facilities," he told Bernama.
Nevertheless, Adam said Tuesday's foreign inflow was offset by two consecutive days of foreign outflow at a tune of RM40.5 million and RM97.6 million net on Wednesday and Thursday, respectively.
"Risk-off mood was spurred amidst doubts if the US Federal Reserve policymakers would further ease the interest rates after the rate cut on Wednesday," he added.
On Wednesday, the US central bank lowered its benchmark interest rate for the second time since July this year by 25 basis points to a range of 1.75 per cent- 2.0 per cent.
The holiday-shortened week just ended also witnessed the People's Bank of China reduced its loan prime rate by five basis points to 4.20 per cent, while the Bank of Indonesia made its third reduction in three months by cutting its seven-day reverse repo rate by 25 basis points to 5.25 per cent.
Bursa Malaysia was closed on Monday for Malaysia Day celebration.
Commenting on the central banks' move, Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said there seemed to be an active intervention from the central banks to spur economic activities.
“While that could be deemed as a positive development, it also shows that the economy, be it a global or regional's, needs some form of assistance to grow, as at the current juncture they are not really looking up.
“Therefore, demand for a safe-haven instrument such as bond would be the most preferred asset class amid risk-off sentiment,” he said.
Back home, Bank Negara Malaysia on Wednesday said the domestic financial stability remained intact in the first half of 2019 amid continued challenges in the outside and inside environments, with the ongoing trade tensions weighing on external demand and regional growth prospects.
The central bank said financial vulnerabilities remained elevated on concerns of slower global growth and rising geopolitical tensions which contributed to increased volatility in financial asset and commodity prices.