Modest foreign selling on Bursa Malaysia as October kicks in

KUALA LUMPUR: The month of October began with a modest foreign net outflow despite some concerns over the plantation sector; however, the slower foreign net outflow was cushioned by an increase in interest in rubber glove stocks.

Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said foreign fund net outflows in September inched higher to RM1.97 billion versus RM1.49 billion in August but it was still far less than the foreign net selling of RM2.56 billion in July.

Cumulatively, total net outflows from foreign funds for the period between January and September stood at RM22.3 billion. Last year, the total foreign funds net outflow was RM11.14 billion compared to RM11.69 billion in 2018.

“In terms of weeks, offshore funds were net sellers in 36 out of 40 weeks so far this year.

“The total foreign net outflow from Malaysia during 9M2020 has not only exceeded the figure in 2019, but also the foreign net selling of RM19.49 billion seen in 2015,” he added.

As for last week’s performance, foreign funds selling of local equities on Bursa Malaysia broadened to RM543.7 million from RM350.7 million net withdrawn during the previous week.

Monday saw international investors offloaded RM292.6 million net of local equities, the highest in a day since Aug 5, 2020. Nevertheless, the FBM KLCI stood strong to close 0.2 per cent higher at 1,511.7 points on the same day, supported by buying activity from retail investors and local institutions.

“Retail investors and local institutions acquired RM47.6 million and RM245.0 million net of local equities, respectively. Some of the positive vibes came from the solid factory profits reported in mainland China,” he said.

Tuesday then witnessed a foreign net outflow of RM167.9 million despite rising COVID-19 infections in Europe, driving concerns about a second wave of the pandemic and the potential for new lockdowns.

The pace of foreign net selling slowed down further to RM83.7 million on Wednesday as investors took the cue of China’s Manufacturing Purchasing Managers Index in September which rose to 51.5 from 51.0 a month earlier.

Nevertheless, international funds came back to Malaysia by acquiring RM58.0 million net of local equities on Friday.

-- BERNAMA