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KUALA LUMPUR (September 21): The year-to-date (YTD) sale of Malaysian shares in Bursa Malaysia is at an exit level not seen since 2015.
So far this year, foreign funds have taken out RM21.41 billion net of local shares, surpassing the foreign net outflow of RM19.49 billion in 2015, Bank Islam Malaysia Bhd said.
In a note today, Bank Islam economist Adam Mohamed Rahim said foreign funds held RM558.4 million net of local shares in Bursa last week, compared to RM71.2 million net acquired the previous week.
Adam said that international investors started the week by withdrawing RM187.9 million net of local shares last Monday.
However, he said that the local stock market was up 0.4%, supported by net buying activity from retail investors who obtained RM280.3 million local shares as they weighed the possibility of a Covid-19 vaccine.
AstraZeneca revealed that it had resumed British clinical trials of its Covid-19 vaccine, suspended after a test patient fell ill.
Meanwhile, China’s state media reported that ‘hundreds of thousands’ of mainland residents received an effective Covid-19 vaccine, without [getting] related adverse effects, ”he said.
Adam said that overseas net sales activity rose to RM223 million last Tuesday, ahead of the Malaysia Day public holiday.
It said this occurred even after Beijing released its August industrial production and retail sales figures, which were up 5.6% and 0.5% from the previous year, respectively, confirming a recovery was taking place. economical.
“Despite this, retail investors and local institutions raised RM153.6 million and RM69.3 million respectively last Tuesday, which raised the FBM KLCI 1.3% to 1,531.3 points, the highest close in more than two weeks.
“Buying interest was likely focused on the banking sector, as the sector was seen to be more stable in the long term, especially when the full-blown moratorium will only be applied selectively from October 1.
“As such, it was not a surprise that the Bursa Malaysia Finance Index rose 2.1%, the biggest winner among sectors,” he said.
Adam said that when Bursa reopened last Thursday, overseas net sales slowed to RM 84.6 million net.
He said Bursa’s net foreign outflow last Thursday was in line with other regional pairs, namely South Korea, Taiwan, Thailand, Indonesia and the Philippines, after the United States Federal Reserve (Fed) said it would maintain the low interest rates for years to come, but failed. propose new stimulus measures.
“On the corporate front, Top Glove Corp Bhd’s best quarterly net profit of RM1.29 billion for 4QFY20 (the fourth quarter ended August 31, 2020) spurred some profit-taking activity, prompting the its share price fell 7.6%.
“The KLCI did the same to close 1.2% lower at 1,513.1 points last Thursday,” he said.
Adam said that overseas net sales momentum slowed further to RM 63 million last Friday, following positive data from the US labor market that showed jobless claims fell from 33,000 to 860,000 in the previous week.
“Apart from that, the movement of crude palm oil futures, which exceeded RM3,000 per tonne last Friday, was another catalyst for foreign investors to reduce their selling activity.
“Compared to its Asian peers, namely South Korea, Taiwan, Thailand, Indonesia and the Philippines, Malaysia has the third smallest net foreign outflow in YTD terms. South Korea and Taiwan have the largest net foreign outflow to date of more than $ 20 billion (RM82.24 billion) each, ”he said.
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