FOREIGN SELLING OF LOCAL EQUITIES WIDENS TO RM579.6 MLN LAST WEEK

By Anas Abu Hassan

KUALA LUMPUR, Aug 2  -- Foreign investors' net selling of local equities surged last week which saw RM579.6 million net of local equities were disposed of compared to the withdrawal of RM147.8 million net in the previous week.

Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said Bursa Malaysia began the week with international investors withdrawing RM139.0 million net of local equities on Monday.

He said Monday’s sentiment was dampened following a sell-off in China's equity market on the move by its government to bar for-profit tutoring in core subjects taught at school, hitting the education-linked counters badly.

"Tuesday then saw a smaller foreign net outflow of RM51.7 million net ahead of the two-day US Federal Reserve (Fed) meeting beginning Tuesday.

"Investors were awaiting the guidance by the US Fed on any path to taper asset purchases, especially after the US continued to record a higher inflation rate in June this year while the Fed has noted that it expects inflation to be transitory in the previous meetings," he told Bernama.

According to Adam, foreign net selling slowed down further to RM39.1 million net on Wednesday as the number of daily COVID-19 cases in the country reached a record high at that point in time despite encouraging daily number of vaccination doses.

"Thursday recorded a fourth straight day of foreign net selling during the week, albeit at a slower momentum of RM24.7 million net, as investors' nerves were calmed after China's securities regulator held a meeting on Wednesday night with executives of top global investment banks with regard to the latest crackdown on for-profit tutoring in core subjects taught at school," he said.

Meanwhile, Adam said foreign funds upped the ante in their selling activity by disposing of RM325.1 million net of local equities on Friday amid the rise in global COVID-19 cases caused by the highly infectious Delta variant. 

"At the same time, investors were closely monitoring political developments in Malaysia," he noted.

On a year-to-date basis, Adam said international investors have sold RM5.5 billion for the first seven months of 2021 compared to RM18.8 billion net dumped in the preceding year.

-- BERNAMA