KUALA LUMPUR, June 22 — Offshore investors continued to reduce their exposure to stocks listed on Bursa Malaysia for the 18th consecutive week, selling RM600.7 million net of local equities last week.
MIDF Research, in its fund flow report today, said in comparison with the other six Asian markets, Malaysia still has the fourth-smallest foreign net outflow on a year-to-date basis.
“As the markets reopened on Monday last week, international investors took out RM358.9 million net of local equities, which was a similar trend for all Asian markets, on fears of a resurgence in Covid-19 infections.
“Nevertheless, foreign funds came into the local market to the tune of RM101.6 million net on Tuesday, snapping the three-day selling spree on Bursa Malaysia,” it said.
The modest entry of foreign funds into Malaysia on Tuesday coincided with the local bourse settling at 1,517.7 points, denoting a one-day gain of 1.26 per cent.
The risk-on sentiment was probably spurred on Tuesday as the recovery rate of coronavirus cases showing signs of stabilisation in the country.
However, the foreign net buying in the local market was short-lived on Wednesday as international funds sold RM83.3 million net of equities.
Investors’ appetite probably was adversely affected by the political instability in the country with a higher likelihood of a snap election taking place, as well as the fresh outbreak of the virus in Beijing.
The level of foreign net selling increased for consecutive three days to RM155.4 million on Friday.
Meanwhile, the overall mood in the market was sombre as investors grew warier of the second wave of Covid-19 infections, particularly in China and the US which was showing signs of increased infections.
“Moreover, the US weekly jobless claims data on Thursday, which showed 1.5 million Americans filing for unemployment insurance in the week before, was higher than forecast.
On a weekly basis, the FBM KLCI declined by 2.5 per cent for the week after settling at 1,507.3 points, while the ringgit depreciated by 0.1 per cent against the greenback to reach 4.2675 during the week. — Bernama