KUALA LUMPUR: International investors continued to dispose of local equities from Monday to Thursday last week but the value shrank to RM567.3 million from the RM906.0 million net disposed of between Monday and Friday in the preceding week.
For the period between July 20 and 23, local institutions recorded a net sell of RM6.9 million compared with a net buy of RM583.2 million for the whole of the previous week, while they disposed of RM234 million from July 20 to 23 against net buying of RM378.7 million previously.
Bank Islam Malaysia Bhd economist Adam Mohamed Rahim told Bernama that in comparison with ASEAN peers, Malaysia recorded the second-highest foreign net outflow of RM18.27 billion after Thailand on a year-to-date basis.
On Monday, he said, international funds took out RM110.8 million net worth of local equities, with the FTSE Bursa Malaysia KLCI (FBM KLCI) settling 0.4 per cent lower despite a record-breaking volume of 12.49 billion shares worth RM6.64 billion for the day.
“With more than 14 million COVID-19 infections recorded worldwide, share prices of major glove makers such as Top Glove, Supermax and Kossan remained the darling of investors and surged to new record highs supporting the Bursa Malaysia barometer index.
“However, Asian equities were mixed as investors cautiously eyed the European leaders summit discussions on the pandemic crisis and their new fiscal stimulus package agreement, ” he said.
Offshore investors upped the ante in their selling activity on Tuesday by offloading RM295.8 million net, the highest foreign net outflow since the middle of June, he noted.
The selloff followed remarks by US President Donald Trump which overshadowed an Oxford University report that their experimental coronavirus vaccine prompted a protective immune response in hundreds of people who got the shot in an early trial, he said.
On Wednesday, Adam said, foreign net outflows dwindled to RM137.3 million with Asian stock markets including Bursa Malaysia wobbling after Beijing reported it had been ordered to close its consulate in Houston within 72 hours.
The US reportedly said the consulate was ordered to be closed “to protect American intellectual property”, among other concerns.
The momentum in foreign net selling activity slowed down further to RM23.4 million on Thursday, coinciding with the local bourse’s rally to close 1.2 per cent higher to breach 1,600 points, he noted.
He observed that the local market was supported by a surge in Malaysian pharmaceutical shares such as Pharmaniaga and Duopharma Biotech earlier in the week, as efforts to develop the COVID-19 vaccine showed early promise.
“This was due to both companies being chosen by the Malaysian government to fill and finish the vaccine once it has been found and procured by the country, ” he said.
Adam added that trading volume has been high lately as investors including retail investors with more skewed towards allocating their cash into equities following the recent cut in the Overnight Policy Rate. – Bernama