Foreign selling narrowed to RM77.9 mln last week

By Niam Seet Wei

KUALA LUMPUR, April 12 -- Foreign selling of Malaysian equities narrowed to RM77.9 million net last week from RM173.3 million net sold in the preceding week.

Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said as at April 9, international investors had disposed of RM1.8 billion net, or US$437.0 million net of local equities on Bursa Malaysia this year.

"Notwithstanding this, Malaysia’s year-to-date foreign net outflow is small in comparison to its ASEAN peers such as the Philippines and Thailand, which have foreign net outflows of above US$900 million (US$1= RM4.133) each," he told Bernama.

According to Adam, Bursa Malaysia had a bad start last week as international investors sold RM41.6 million net of local equities on Monday. 

"The sentiment on Monday was sluggish following a record increase in COVID-19 infections in India, which saw office workers having to work from home and malls to be shut throughout April for the state of Mumbai," he said.

He said foreign net selling activity gained momentum on Tuesday to reach RM94.6 million, despite the rebound in crude oil prices which enhanced the appeal of Malaysian assets. 

Nevertheless, he said foreign funds made a proverbial bang on Wednesday, acquiring RM157.1 million net of local equities, mainly rubber glove stocks, thus boosting share prices of Top Glove, Supermax and Hartalega by at least 10 per cent.

"Interest in glove counters was revived following the latest wave of COVID-19 outbreaks in Europe and India which will drive stronger demand for rubber gloves," he added.

However, Adam said the heavy foreign net inflow was short-lived, with foreign funds withdrawing RM43.5 million on Thursday as the spread of the coronavirus in Asia curbed risk appetite.

Friday saw a foreign net outflow of RM49.9 million as the overall sentiment appeared mixed, he said.

According to Adam, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) gained 0.6 per cent on Friday, anchored by the rise in shares of telcos, namely Digi and Axiata, following news of a merger between the two telco giants.

"But investors were also digesting the unexpected rise in weekly US jobless claims, which signalled an uneven recovery in the labour market," he said.

-- BERNAMA