KUALA LUMPUR: After four weeks of meandering, foreign funds took a breather in Malaysia as ratcheting political tensions hurt their risk appetite, according to MIDF Research.
The research house said that for the week ended Aug 11, 2017, the net amount sold off by foreign investors was RM63.1mil, based on transactions in the open market which excluded off market deals.
“Foreign funds were net sellers in three out of five trading days. Foreign selling peaked on Friday as foreigners disposed of RM93.5mil net, the highest in a day since July 5,” MIDF said in its weekly fund flow report.
It added that the attrition on Friday coincided with the FBM KLCI dropping below 1,770 points at close and the ringgit hitting a one-month low.
The weekly outflow was in line with those seen by regional peers notably South Korea, Indonesia and Taiwan.
MIDF said foreign investors had only been net sellers for six weeks this year compared to last year’s 27 weeks.
Despite last week’s foreign withdrawal, the cumulative year-to-date inflow was slightly unchanged at RM10.7bil net compared to RM10.8bil net in the preceding week.
MIDF said foreign participation rate turned sluggish as the foreign average daily trade value (ADTV) declined 31% from RM895mil in the prior week to RM615mil, the lowest since the first week of 2017.
Retail participation remained vibrant. Retail ADTV remained above the RM800mil mark as it only decreased by 0.5% from RM887mil to above RM882mil last week.
For the week ended Aug 11, British American Tobacco (M) Bhd stocks were the beneficiary of the highest net money inflow of RM27.91mil.
The second-highest net money inflow beneficiary was Fraser & Neave Holdings Bhd amounting to RM5.84mil while MyEG Services Bhd saw the third-highest money inflow of RM4.13mil.