KUALA LUMPUR (Feb 7): Foreign investors continued to sell Malaysian equities for the fourth consecutive week last week, dumping RM380.8 million worth of stocks — up 89.6% from the previous week — despite it being a shortened four-day trading week due to the Federal Territory Day celebration on Wednesday (Feb 1), according to MIDF Research.

They net bought RM35.6 million on Thursday last week (Feb 2), but net sold RM48.6 million on Monday (Jan 30), RM98.9 million on Tuesday (Jan 31) and RM68.1 million on Friday (Feb 3), its analyst Royce Tan Seng Hooi wrote in a note Tuesday (Feb 7).

The latest outflows raised the year-to-date foreign investors’ net sold quantum to RM89.1 million.

“There may be renewed signs of political uncertainties that have emerged following the sacking and suspension of senior and influential Umno members, as the party is part of the unity government. The appointment of the prime minister’s daughter as his economic and senior advisor also sparked debates from various parties, who have alleged nepotism and cronyism and that it would affect the country’s corruption perception index ranking,” Tan noted.

Local institutions, meanwhile, “maintained their shopping spree on Bursa Malaysia, net buying RM130.6m (million) last week”, he said. “This is their fourth consecutive week of net buying... Year-to-date, local institutions have net bought RM816 million”.

Local retailers were net buyers last week, totalling RM49.4 million, reversing their net selling trend seen in the last three weeks, he said.

In terms of participation, there was an increase in average daily trading volume (ADTV) across the board by 64.7%, 19.6% and 7.8% from foreign investors, local institutions and local retailers respectively, Tan added.
 

The top three sectors which saw net inflows by foreign investors last week were consumer products & services at RM58.7 million, technology at RM23.7 million, and telecommunications & media at RM15.7 million. The bottom three sectors with net outflows were financial services at RM174 million, healthcare at RM43.3 million and plantation at RM35.9 million.

Conversely, foreign funds continued to pour into Asian equities for the fifth consecutive week, with a net inflow of US$3.21 billion into the eight Asian exchanges that MIDF Research tracks — driven mainly by inflows to Taiwan and South Korea.

“Taiwan was the only country that recorded net inflows every day, starting with a bullish net inflow of US$2.51 billion on Monday (Jan 30), as trading resumed after a six-day break in conjunction with the Chinese New Year,” Tan noted.

South Korea also registered its fifth consecutive week of net foreign fund inflows, at US$1.11 billion last week, as foreign investors appear to be banking on a potential recovery there, he said, while Vietnam, Indonesia, and the Philippines saw their third consecutive week in the positive region with net foreign inflows of US$71.6 million, US$52.6 million and US$9.9 million.

Thailand saw a net foreign fund outflow of US$272.4 million and was the only country with net foreign fund outflows every day last week, reversing a five-week net inflow trend.

India, however, was the worst performing market with a net foreign fund outflow of US$2.51 billion, which marked its sixth consecutive week of net foreign outflows, as the market continued to reel from the effects of the massive selloff in Adani Group’s stocks that has now ballooned to US$117 billion.