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By Anas Abu Hassan
KUALA LUMPUR, April 19 -- Foreign selling of local equities has increased to RM235.2 million net last week, compared to RM77.9 million net in the preceding week, said Bank Islam Malaysia Bhd's economist Adam Mohamed Rahim.
He said last Tuesday recorded the highest daily foreign net outflow since March 31, 2021, as foreign investors dumped RM161.5 million net of local equities.
International funds disposed RM48.7 million net of local equities last Monday amid profit-taking after the hype on the merger between Axiata Group and Digi.com Bhd subsided from the previous week, causing the two stocks to decline by more than 3.0 per cent on Monday.
According to Adam, Malaysia's year-to-date foreign net outflow stands at RM2 billion net or US$493.9 million, with April recording a foreign net outflow of RM267.3 million net, to-date.
"There was optimism from China’s trade data which revealed a 30.6 per cent year-on-year (y-o-y) growth in its exports, while imports surged by 38.1 per cent y-o-y, indicating that demand from China remains strong.
"However, concerns are mounting on allegations that China’s COVID-19 vaccines are less effective at quelling the disease, raising questions from nations from Brazil to Hungary that are depending on the shots, as well as the country’s own inoculation drive," he told Bernama.
According to Adam, foreign net selling activity continued on Wednesday, albeit at a slower pace of RM52.7 million net on news that the International Energy Agency (IEA) has raised global oil demand forecast in 2021.
"The IEA boosted estimates for this year’s oil consumption growth by 230,000 barrels per day to 5.7 million barrels per day amid stronger outlook for the United States (US) and China.
"On Thursday, the five-day foreign net selling streak ended as foreign investors acquired RM78.6 million net of local equities," he added.
However, offshore investors were back in selling mode on Friday as RM50.9 million net of local equities were sold amid concerns over the higher daily tally of COVID-19 cases in Malaysia.
Meanwhile, MIDF Research reported that as at April 16, FBM KLCI decreased by 0.24 per cent from the previous week, settling at 1,608.38 points, while the ringgit had weakened by about 0.20 per cent against the greenback to USD/MYR 4.1257 last Friday.
However, most major equity markets worldwide saw positive performance last week, buoyed by the bullish sentiment emanating from the positive US economic data, the International Monetary Fund’s upward revision of its forecast for 2021 world economy, and easing bond yields.