Foreign fund selling on Bursa shrinks to RM289m

KUALA LUMPUR: Foreign selling on Bursa Malaysia narrowed to RM289.3 million last week from RM416.7 million in the preceding week, MIDF Research said in its weekly fund report.

This comes after the announce-ment of the revised East Coast Rail Link (ECRL) project which helped stem foreign fund outflows.

Foreign selling for the week started modestly on Monday with RM12 million of stocks being sold, the lowest in 11 trading days.

“The level of foreign net selling jumped by more than four times on Tuesday to reach RM53.1 million as Bursa’s Telecommunication Index led decliners amongst the sectoral indices.”

On Wednesday, investors shrugged off the cut in the Inter-national Monetary Fund’s global economic growth outlook for 2019 from 3.5% to 3.3%. Offshore in-vestors returned to Malaysia acquiring equities amounting to RM67.7 million.

Foreign net selling resumed at a higher pace on Bursa on Thursday at RM164.5 million, due to reports of Khazanah Nasional Bhd offering the sale of Tenaga Nasional Bhd shares under a share placement to raise RM1.05 billion, causing the utility stock to drop by 4.1%. The FBM KLCI closed at the 1,624 points, the lowest since late December 2016.

On Friday, the foreign net selling level declined to RM126.4 million as the revised ECRL project will see its cost reduced by about a third.

The local bourse reacted positively to the announcement by gaining for the first time in three days to settle at 1,630 points on Friday.

Year-to-date, international funds have been net sellers in Malaysia for nine out of 15 weeks with a net selling of RM2.05 billion.

“Amongst the four Asean markets we monitor, Malaysia retains its position as the nation with the largest foreign net outflow amongst the four Asean markets we monitor.

“Meanwhile, amongst the seven Asian markets we track, India is the nation with the largest foreign net inflow worth more than US$8.5 billion or RM30 billion as the general election held in phases had began in the republic,” MIDF Research added in its report.

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