Tide uncomfortably high, highest selling of the year

KUCHING: Foreign selling on Bursa Malaysia continued for the third consecutive week and surged to its highest level this year.

The research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) highlighted via its research report that the net amount offloaded by foreign investors spiked to RM1.004 billion from RM623 million the week prior.

This is the highest since September 2015 and the first time it exceeded the RM1 billion mark since August last year, MIDF Research said.

This is estimated based on transactions in the open market which excluded off market deals.

Foreigners were net sellers every single day last week. As of Friday, foreign investors had been selling in 12 out of 13 straight days.

“We note that the weekly total was exaggerated by heavy selling on Tuesday and Friday. Attrition was actually soft on Monday and Wednesday.

“Indeed foreigners turned marginal buyer on Thursday after 11 days of selling. It was on Tuesday that the amount sold surged to RM222.2 million, the sixth highest this year.

“The killer blow came last Friday when foreigners dumped RM657.6 million, the highest attrition in a single day since August 28, 2013, when RM901.2 million exited local equity,” it highlighted.

Last week’s foreign withdrawal reduced the cumulative net foreign inflow into shares listed on Bursa to an estimated RM4.35 billion, down from a peak of RM6.47 billion.

The amount is still modest relative to the RM19.5 billion and RM6.9 billion net outflow in 2015 and 2014 respectively.

Despite heavy selling, foreign participation rate rose by only 0.5 per cent last week and was still elevated though as the average daily value of shares traded amounted to RM1.07 billion, from RM1.06 billion the week before.

The research house explained that foreign participation rate had averaged more than RM1 billion for two straight weeks now with Friday, total foreign trade surging to RM1.69 billion, the highest in 30 days.

Local institutions supported the market, mopping up RM903.8 million, as participation rate surged to RM2.3 billion, the fifth highest this year.

Adding to that, the research house noted that retail buyers acquired RM100.2 million on yet moderate participation rate of RM676 million. However, MIDF Research note that retail buyers came alive on Friday, mopping up RM112.6 million.

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