KUCHING: Global funds reacted to the unprecedented outcome of Malaysia’s 14th General Election (GE14) by dumping RM2.48 billion of local equities in the open market (excluding off-market deals) last week, the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) observed in its latest fund flow report.

According to MIDF Research, this is the heaviest weekly foreign selldown in Malaysia since the week ended August 23, 2013 which saw a net outflow of RM2.9 billion.

“Foreign investors have been net sellers for 10-straight trading days as of last Friday,” the research arm said.

“The first trading day after GE14 saw a net outflow of RM682.6 million net. Nevertheless, the trading value on Bursa was the highest ever recorded on the same day at RM7.3 billion.

“Foreign selling on Tuesday then swelled to RM837.3 million net, the largest in a day since early February 2018.”

MIDF Research highlighted that on Wednesday, foreign outflows tapered to RM320.7 million as investors cheered the post-GE14 reforms which included the reduction of GST to zero per cent effective from June 1 in addition to the pardon granted to jailed former Deputy Prime Minister Datuk Seri Anwar Ibrahim.

It further highlighted that the FBM KLCI followed suit to settle 0.54 per cent higher at an eight-day trading high of 1,858 points as buying activity by retailers and local funds continued amid renewed optimism.

“Foreign investors continued selling on Thursday and Friday to a tune of RM384.4 million net and RM251.2 million net as the surge in US treasury yields during the week crept into minds of investors.”

MIDF Research noted that due to the intense selling pressure, the cumulative net inflow into Malaysia so far this year has been substantially reduced to RM40.2 million from RM2.52 billion before GE14.

The research arm was cautiously optimistic that this cumulative figure may gradually pick up as more political clarity comes into picture.

“Despite recording the largest weekly outflow among the four Asean markets we monitor last week, Malaysia is still the major beneficiary of foreign inflows.”

As for foreign participation, MIDF Research said that it remains strong as the foreign average daily trade value(ADTV) soared by almost 100 per cent to RM2.39 billion, the highest in 24 weeks.

“Similarly, participation in the retail and institutional market was robust as their ADTVs reached a level not seen 18 weeks.”

CIMB Group Holdings Bhd registered the highest net money inflow of RM41.21 million last week.

Genting Malaysia Bhd recorded the second highest net money inflow of RM14.15 million while Genting Bhd saw the third highest net money inflow of RM10.95 million.

Felda Global Ventures Bhd saw the largest net money outflow of RM14.52 million last week.