Foreign selling of Malaysian equity continued for the third consecutive week, albeit at a slower pace of RM536 million last week, from RM556.9 million in the prior week.
In a fund flow report on Monday (March 20), MIDF Research’s Royce Tan Seng Hooi said funds continued to leave Bursa Malaysia as the net selling continued for the third consecutive week.
He said foreigners net sold RM536.0 million last week, only 3.8% lower than the net selling amount of RM556.9 million the week before.
“They net sold every day of the week, with the highest amount recorded on Tuesday at RM251.3 million, followed by RM99.7 million on Thursday and RM90.3 million on Friday.
“Sentiments remained weak due to the challenges faced in the US banking sector. Foreign investors have been net sellers for the 13 trading days since March 1,” he said.
Tan said they have net sold RM1.78 billion year-to-date.
He said out of the 11 weeks so far this year, they have been net sellers for eight weeks.
“Sectors that saw net foreign inflows were Construction (RM67.9 million), Technology (RM13.2 million) and Transportation & Logistics (RM7.8 million), while the sectors that saw net foreign outflows were Financial Services (RM359.5 million), Industrial Products & Services (RM90.3 million) and Consumer Products & Services (RM63.5 million).
“Meanwhile, local institutions continued to support domestic equities, net buying for the third consecutive week,” he said.
Tan said they net bought RM565.7 million, the highest weekly amount in 2023 and the highest since the week ended Dec 9, 2022.
He said local institutions were net buyers every day, the strongest seen on Friday at RM187.7 million.
“As opposed to foreign investors, they have been net buyers every day since March 1.
“They have net bought RM1.76 billion of equities, with eight out of 11 weeks net buying,” he said.
Tan said local retailers turned net sellers at a rate of RM29.7 million last week, after three consecutive weeks of net buying.
He said they net sold every day except on Tuesday, when they net bought RM113.2 million.
“The highest net selling amount by local retailers was on Friday at RM97.5 million. “Year-to-date, they have net bought RM14.8 million of equities, with six out of 11 weeks of net buying,” he said.
Tan said in terms of participation, there was an increase in average daily trading volume (ADTV) among local retailers by 18.4%, local institutions by 40.4% and foreign investors by 51.0%.
Commenting on the global scenario, Tan said markets went on a roller-coaster ride last week due to ripple effects of a banking turmoil that was triggered by the failures of Silicon Valley Bank (SVB) and Signature Bank in the United States and as investors mull over possibilities of a slowdown or pause in rate hikes by the Federal Reserve in their Federal Open Market Committee (FOMC) meeting this week.
He said regulators took control of Signature Bank on March 12, as depositors withdrew billions from the New York-based bank, spooked by fears over SVB’s collapse.
“The next trigger was in Switzerland, as Credit Suisse saw its share price tanked about 30%, forcing it to borrow up to US$54 billion from the Swiss National Bank to shore up its liquidity.
“The central bank stepped in to force a merger, which will see UBS acquiring Credit Suisse for more than US$3.25 billion,” he said.
Sources: theedgemarkets