Foreign Selling On Bursa Malaysia Slowing Down In September

By Nurul Jannah Kamaruddin KUALA LUMPUR, Sept 28 (Bernama) -- With three more trading days left, September is set to be another month of foreign net outflows, but the selling spree has contracted at a slower pace versus the previous months. Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said so far, foreign funds offloaded a total of RM1.43 billion equities on Bursa Malaysia. He said during the March-July period, foreign funds dumped more than RM2 billion each month. As for last week’s performance, foreign funds selling of local equities on Bursa Malaysia narrowed to RM350.7 million during the whole week compared to RM558.4 million net withdrawn during the previous week. "It was a manic start to the week for the market as international investors dumped RM256 million net of local equities on Monday, dragging the local bourse 0.4 per cent to close below 1,500 points for the first time in seven trading days. "Monday’s sell-off followed Wall Street’s lower close on Friday in addition to the move by the People's Bank of China in Beijing to leave key rates unchanged, disappointing traders looking for stimulus," he told Bernama. On Tuesday, foreign investors made their way back to Bursa Malaysia to the tune of RM127.4 million net, while other Southeast Asian peers, namely Thailand, Indonesia and the Philippines experienced foreign net outflows. The FBM KLCI index followed suit to gain 0.4 per cent to close at 1,505.8 points on Tuesday, bucking the trend of other regional markets, which were in the red. "Risk aversion captured the region as stocks followed the overnight losses in US equities amid worries over COVID-19 restrictions and prospects for US fiscal stimulus. "Meanwhile, Bursa Malaysia stood strong as there was buying interest in banking stocks which are index members of the FBM KLCI. All banking stocks in the FBM KLCI advanced on the same day except for CIMB Group Holdings, which was unchanged," he noted. However, the foreign net inflow was short-lived with international funds taking out RM139.1 million net of local equities on Wednesday, as the market experienced a knee jerk reaction to reach below 1,500 points for the second time during the week, after political jitters from Anwar Ibrahim’s claim that he had garnered a majority of support from members of Parliament to form a government. "International investors were back in buying mode on Thursday, acquiring RM42.2 million net of local equities with rubber glove counters being the darling among investors, despite Wall Street's overnight selloff that was stoked by worries about rising COVID-19 cases and the lack of progress on a fiscal stimulus package by the US Congress. "As such, Malaysia was the only market among its ASEAN peers, namely Thailand, Indonesia and the Philippines to experience a foreign net inflow," Adam added. Meanwhile, offshore investors moved to the sidelines on Friday, selling RM125.2 million of local equities ahead of the Sabah state election on Saturday. "The anxiety ahead of the polls somewhat outweighed the news of the US House Democrats’ preparation for an approximate U$2.4 trillion spending package and may bring the bill to a vote this week. "Nevertheless, the FBM KLCI was steady to close 0.6 per cent higher amidst the positive vibes coming from FTSE Russell’s decision to retain Malaysia on the watch list for the World Government Bond Index," he said. In terms of participation, the average daily traded value (ADTV) of foreign investors remain robust above RM1.0 billion during the week. Retail investors have been net sellers of local equities on every day of the week, selling RM111 million net of local equities on Thursday, the highest in more than a month. "Nevertheless, we observed that their participation is still healthy, with their ADTV hovering above the RM3 billion mark for the week," he added. -- BERNAMA