US banking turmoil accelerates foreign funds exit from Bursa Malaysia

FOREIGN funds continued to leave Bursa Malaysia as their net selling continued for the third consecutive week.

Foreigners net sold -RM536.0 mil last week, only -3.8% lower than the net selling amount of -RM556.9 mil the week prior, according to MIDF Research.

Net selling occurred every day of the week with the highest amount recorded on Tuesday (March 14) at -RM251.3 mil, followed by -RM99.7 mil on Thursday (March 16) and -RM90.3 mil on Friday (March 17).

“Sentiments remained weak due to the challenges faced in the US banking sector,” observed MIDF Research in its weekly fund flow report. “Foreign investors have been net sellers for 13 trading days since March 1.”

Year-to-date (YTD), they have net sold -RM1.78 bil of equities on Bursa Malaysia. Out of the 11 weeks so far this year, they have been net sellers for eight weeks.

Sectors that saw net foreign inflows were construction (RM67.9 mil), technology (RM13.2 mil) and transportation & logistics (RM7.8 mil) while the sectors that saw net foreign outflows were financial services (-RM-359.5 mil), industrial products & services (-RM90.3 mil) and consumer products & services (-RM63.5 mil).

Meanwhile, local institutions continued to support domestic equities with net buying for the third consecutive week. They net bought RM565.7 mil worth of equities, the highest weekly amount in 2023 and the highest since the week ended Dec 9, 2022.

Local institutions were net buyers every trading day with the strongest buying seen on Friday (March 17) at RM187.7 mil.

“As opposed to foreign investors, they have been net buyers every day since March 1. They have net bought RM1.76 bil of equities with eight out of 11 weeks net buying,” noted MIDF Research.

However, local retailers turned net sellers at a rate of RM29.7 mil last week after three consecutive weeks of net buying. They net sold every day of the week except on Tuesday (March 14) when they net bought RM113.2 mil.

The highest net selling amount by local retailers was on Friday (March 17) at RM97.5 mil. YTD, they have net bought RM14.8 mil of equities with six out of 11 weeks of net buying.

In terms of participation, there was an increase in average daily trading volume (ADTV) among local retailers by 18.4%, local institutions (40.4%) and foreign investors (51.0%).

In comparison with another four Southeast Asian markets tracked by MIDF Research last week, Vietnam is the only market which posted net foreign fund inflow with US$91.7 mil while the Philippines encountered the highest net outflow at -US$496.9 mil followed by Thailand (-US$282.7 mil), Malaysia (-US$119.4 mil) and Indonesia (-US$47.9 mil).

The top three stocks with the highest net money inflow from foreign investors last week were Carlsberg Brewery Malaysia Bhd (RM95.9 mil), Sunway Bhd (RM68.0 mil) and IOI Corp Bhd (RM47.2 mil). – March 20, 2023

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