OFFSHORE investors became net sellers on Bursa Malaysia last week. International investors sold RM774.1 mil net of local equities last week, almost nine times more than what was sold in the preceding week, according to MIDF Research.
Major equity markets worldwide ended mixed last week as the latest round of the US-China trade tensions added jitters to the current Covid-19 pandemic.
Brent crude oil price surged 17.1% during the week to settle at US$30.96 per barrel last Friday. US oil rigs, as measured by oil services firm Baker Hughes, fell by 33 last week to reach 292 as drillers cut back on activity after a plunge in demand for crude forced by the coronavirus pandemic. The number had previously never fallen below 300 since the 2008/09 financial crisis.
In Asia, international funds turned net sellers. Based on the provisional aggregate data for the seven Asian exchanges (Thailand, Indonesia, the Philippines, Korea, Taiwan, India and Malaysia) that MIDF tracks, investors classified as foreign disposed of US$1.42 bil net last week, almost cancelling off the US$1.9 bil bought in the week before.
“Foreign investors have so far taken out RM11.08 bil net of local equities from Malaysia. Malaysia remains as the nation with the third smallest foreign net outflow on a year-to-date basis after Indonesia and the Philippines, in comparison to its other six Asian peers,” said MIDF analyst Adam Rahim.
The FBM KLCI declined by 1.8% for the week after settling at 1,382.3 points. Likewise, the ringgit depreciated by 0.7% against the greenback to reach US$1/RM4.33 during the week.
Monday saw the highest net outflow as international funds offloaded RM319.9 mil net of local equities, the largest in a day since mid-March this year. Market sentiment was hurt by rising tensions between Washington and Beijing after US President Donald Trump hinted over the weekend that he could impose new tariffs on Chinese goods because of the claim that China lacked transparency on the coronavirus.
Foreign net selling activity dipped on Tuesday (May 5) to RM96.5 mil, coinciding with Bank Negara Malaysia’s 50-basis-point cut in its key interest rate to a 10-year low of 2%. The local bourse reacted positively by closing 0.9% at 1,376.9 points on the same day.
The momentum of foreign net outflow accelerated on Wednesday to RM247.9 mil as investors booked profits ahead of Thursday’s public holiday.
As markets reopened from the public holiday, foreign funds on Friday continued to sell local equities but at a slower pace of RM109.8 mil net.
Investors cheered over a call between Washington and Beijing that eased tensions and wagered that moves to open up economies after coronavirus lockdowns will succeed.
Top Glove registered the highest net money inflow of RM9.62 mil last week. Its share price gained 0.69% for the week, outperforming the local bourse which had a 1.81% weekly loss.
Hong Leong Bank recorded the second highest net money inflow of RM4.85 mil. Its share price was 0.75% higher while KL Kepong saw the third highest net money inflow of RM4.73 mil.
Nonetheless, it is notable that net money inflow amid retreating share price may indicate a buy on weakness (BOW) stance among some investors.
On the other hand, Maybank saw the largest net money outflow of RM4.11 mil last week. Its stock price was 2.11% lower for the week.
Public Bank recorded the second largest net money outflow of RM2.51 mil during the week under review. Its share price was 3.91% lower during the week.
Maxis registered the third largest net money outflow of RM1.97 mil with its share price being 3.83% lower. – May 12, 2020
