FOREIGN INVESTORS ACQUIRED RM8.6 MLN NET OF LOCAL EQUITIES LAST WEEK

By Harizah Hanim Mohamed

KUALA LUMPUR, Jan 4  -- Foreign investors turned into net buyers during the last week of 2020 from Dec 28-31, 2020, with net inflow amounting to RM8.6 million compared with RM223.8 million net of local equities in the the preceding week.

Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said Bursa Malaysia began the week on a rather positive note as international investors snapped up RM49.4 million net of local equities on Monday, supported by optimism sparked across markets after US President Donald Trump finally signed a bill containing US$900 billion in pandemic relief.

“Trump backing down from last-minute demands that undercut his own negotiating team, risked a government shutdown and delayed much needed economic aid as COVID-19 cases continue to rise in the US,” he said.

The FBM KLCI index and the ringgit followed suit to close 0.2 per cent and 0.3 per cent higher, respectively, on Monday.

For the full year of 2020, international investors sold RM24.6 billion net of local equities on Bursa Malaysia. The last time foreign net selling was near such levels was back in 2015 when offshore funds pulled out RM19.5 billion net of local equities.

In comparison with its Asian peers, Malaysia recorded the fourth largest foreign net outflow in 2020 with South Korea experiencing the largest foreign net outflow among seven Asian countries.

Meanwhile, India was the only country among the seven countries, which saw an annual foreign net inflow amounting to US$23.4 billion.

MIDF Amanah Investment Bank Bhd, in a research note, said Malaysia saw the smallest net inflow among Southeast countries, with last week being the second net inflow from foreign investors since early November.

Cumulatively, foreign investors were net sellers with outflow of RM726.97 million throughout December, lower than the outflow in November of circa RM1.03 billion.

For the last week of December, retailers were active buyers every day of the week except on Monday.

“The largest net inflow was on Tuesday and smallest on Thursday to the tune of RM104.66 million and RM44.06 million, respectively.

“It was opposite for local institutions as the market saw local institutions as net sellers every day except in Thursday,” MIDF added.

The market sentiment was poor as the new year’s eve approaching, as the FBM KLCI was swimming in the sea of red with all of its constituents recording daily declines, bucking the trend of regional peers such as China’s CSI 300 index which gained nearly by 2.0 per cent.

Selling activity was prevalent in plantation companies due to the ban by the US on imports of palm oil by Sime Darby Plantation Bhd, dragging the Bursa Malaysia Plantation Index by 1.5 per cent.

On the other sectors, Top Glove saw the largest net money outflow of RM20.71 million last week, CIMB recorded the second largest net money outflow of RM1.87 million and Genting registered the fourth largest net money outflow of RM1.20 million.

-- BERNAMA