THE novel coronavirus outbreak wreaked havoc across Asian markets last week as the World Health Organisation (WHO) declared a global health emergency.

Major global equity markets ended the week in a sea of red as growing fears of the outbreak which began in Wuhan prompted investors to shift to safe-haven assets.

MIDF Research analyst Adam M Rahim said: “All seven markets under our coverage – Thailand, Indonesia, the Philippines, South Korea, Taiwan, India and Malaysia – recorded a weekly foreign net outflow. Based on the provisional aggregate data for the seven Asian exchanges that we track, investors classified as ‘foreign’ offloaded US$3.65 bil net last week.”

Brent crude oil dropped 6.7% for the week to settle at US$56.62 per barrel, the biggest slump in 13 months.

China’s factory activity faltered in January, adding to fears about the fallout to the economy from the month-long coronavirus epidemic, which showed no signs yet of coming under control.

Like its regional peers, Bursa Malaysia saw an exodus of foreign funds to the tune of RM659.7 mil last week, the largest weekly foreign net outflow in eight weeks.

The FBM KLCI declined by 2.7% last week after settling at 1,531.1 points, the largest drop in more than a year. Likewise, the ringgit depreciated by 1% against the greenback to reach 4.098 against the USD.

The local stock barometer began the week on a sombre note as offshore investors sold RM70.9 mil net on Tuesday. The ringgit also followed suit to lead decliners in Asia with a 0.7% depreciation against the greenback. Travel-related counters such as Malaysia Airports Holdings Bhd and AirAsia Group Bhd lost ground to decline by 6.7% and 3.8% respectively.

Foreign net selling activity picked up steam to reach RM234.1 mil net on Wednesday (Jan 29) as the number of people infected with the coronavirus reached around 6,000. The heavy foreign net selling was also observed in other peers, namely Thailand and India.

International investors continued selling for the third consecutive day on Thursday to a tune of RM104.2 mil. Although the US Fed’s move to leave interest rates unchanged was expected, sentiment waned after Fed Chair Jerome Powell cited uncertainties on trade policy and the coronavirus pandemic.

Friday saw Bursa experiencing another bloodbath as offshore funds offloaded RM250.5 mil net, following the WHO’s declaration of an international emergency. The FBM KLCI declined 0.9% to 1,531.1 points, the lowest close in more than five years.

For January, international funds sold RM138.3 mil net of equities. In comparison to the other three Asean markets tracked by MIDF, Malaysia had the smallest foreign net outflow on a year-to-date basis after Thailand and the Philippines.

In terms of participation, the average daily traded value (ADTV) of foreign investors surged by 67.2% year-on-year during the week despite the holiday-shortened week. In addition, the ADTV breached the healthy level of RM1 bil at RM1.13 bil.

Malayan Banking Bhd registered the highest net money inflow of RM10.36 mil last week. Its share price dropped 1.17% for the week, outperforming the local bourse which had a 2.65% weekly loss.

Genting Malaysia Bhd recorded the second highest net money inflow of RM10.15 mil while CIMB Group Holdings Bhd saw the third highest net money inflow of RM9.42 mil.  

Genting’s share price was 4.13% lower, underperforming the local bourse. Nonetheless, it is notable that net money inflow amidst retreating share price may indicate a buy on weakness stance among some investors. CIMB’s share price was 2.57% lower during the week, outperforming the local bourse.

On the other hand, Top Glove Corporation Bhd saw the largest net money outflow of RM11.37 mil last week. Its stock price was 5.60% higher for the week, substantially outperforming the FBM KLCI. Net money outflow amidst advancing share price may indicate a sell on strength stance among some investors.

Tenaga Nasional Bhd recorded the second largest net money outflow of RM9.64 mil during the week under review. Its share price was 3.26% lower during the week.

Sime Darby Plantation Bhd registered the third largest net money outflow of RM9.62 mil during the week. The counter was 3.98% lower, underperforming the local benchmark which was 2.65% lower for the week. – Feb 3, 2020



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