THE pace of foreign net selling on Bursa continued to slow down last week. Based on data from the exchange operator, international investors sold RM486 mil net of local equities between March 30 and April 3, compared to the RM631.9mil net disposed of in the preceding week.
The FBM KLCI declined 0.9% for the week after settling at 1,330.7 points. Similarly, the ringgit depreciated by 0.4% against the greenback to reach US$/RM4.355 during the week.
MIDF Research analyst Adam M Rahim said: “On Tuesday, offshore investors mopped up RM113.4 mil net of local equities, snapping the 28-day foreign net selling streak. The local bourse gained 1.7% to close at 1,350.9 points, the highest close in more than two weeks. Risk-on appetite was mainly boosted by the expansion in China’s manufacturing activity in March 2020.”
However, the foreign net inflow was short-lived as foreign investors dumped RM253.4 mil the following day, the highest foreign net outflow during the week. Investors’ nerves were frayed as Asian manufacturing activity data, including Malaysia’s, showed a slowdown last month.
The momentum of foreign net selling decelerated to RM96.8 mil net on Thursday following President Trump’s expectation that Saudi Arabia and Russia will announce a deal on an oil production cut. As such, Brent crude oil price jumped by 28% to US$29.90 per barrel, the largest daily gain in history.
Most equity markets worldwide were in a sea of red last week as the number of confirmed Covid-19 cases around the globe surpassed the one million mark.
Brent crude oil recorded its first gain in six weeks after settling 36.8% higher at US$34.1 per barrel. The rally was partially due to Trump’s expectation that world oil producers will resume production cuts. Sentiment was further aided by data showing that US drillers had cut the number of rigs actively pumping oil by 62 last week, the most in a week since 2015.
Foreign investors marked their eighth straight day of net selling in Asian equities. Based on the provisional aggregate data for the seven Asian exchanges (Thailand, Indonesia, Philippines, Korea, Taiwan, India and Malaysia) that the research house tracks, investors classified as “foreign” sold US$3.26 bil net last week, slightly lower than the US$3.43bil disposed of in the preceding week.
CIMB Group Holdings Bhd registered the highest net money inflow of RM5.74 mil last week. Its share price dropped 1.96% for the week, underperforming the local bourse which had a 0.93% weekly loss. Nonetheless, it is notable that net money inflow amidst retreating share price may indicate a buy on weakness (BOW) stance among some investors.
Top Glove Corporation Bhd recorded the second highest net money inflow of RM4.63 mil. Its share price was 1.27% higher, outperforming the local bourse which had a 0.93% weekly loss. Meanwhile, Public Bank Bhd saw the third highest net money inflow of RM3.75 mil. Its share price was 1.26% lower during the week, underperforming the local bourse which was 0.93% lower.
On the other hand, Maxis Bhd saw the largest net money outflow of RM5.21 mil last week. Its stock price was 3.35% lower for the week, underperforming the FBM KLCI.
MyEG Services Bhd recorded the second largest net money outflow RM4.23 mil during the week. Its share price was 1.59% higher during the week, outperforming the market benchmark which had a 0.93% weekly loss. It is notable that the net money outflow amidst advancing share price may indicate a sell on strength (SOS) stance among some investors.
Malaysia Airports Holdings Bhd registered the third largest net money outflow of RM3.17 mil during the week. Its share price was 2.05% lower, underperforming the local benchmark. — April 6, 2020.
