By Rosemarie Khoo Mohd Sani
KUALA LUMPUR, Sept 7 (NNN-BERNAMA) — Foreign investors continued to offload Malaysian equities during the Sept 1-3, 2020 period, with net selling widening to US$134.47 million (RM558.0 million) from US$116.85 million (RM484.9 million) during the Aug 24-28, 2020 period. (US$1 = RM4.14)
Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said Bursa Malaysia (Malaysia’s Stock Exchange) got off to a rough start in September as international investors dumped RM379.9 million net of local equities on Tuesday, a level not seen in a day since April 2018.
Notwithstanding, he said the local bourse only closed 0.3 per cent lower at 1,521.4 points on Tuesday as sentiment was partly buoyed by China’s services sector gains, indicated by the country’s services purchasing managers’ index (PMI) which rose to 55.2 in August from 54.2 in the previous month.
“The level of foreign net selling, meanwhile, dropped substantially to -RM26.0 million net on Wednesday following a rally on Wall Street overnight, spurred by positive data as the COVID-19 pandemic led some regions (to take measures) to tackle recession,” he told Bernama.
The S&P 500 and Nasdaq Composite rose to fresh highs on Tuesday after data showed that the United States’ (US) manufacturing activity accelerated in August, growing for the third straight month, driven by new demand and faster export orders.
On Thursday, international funds upped their selling activity by withdrawing RM152 million net of local equities.
“Although the rise in US’ private payrolls in August gave some positivity to the market, this was outweighed by concerns of fresh geopolitical tensions between the US and China,” said Adam.
The latest tensions came after the US State Department on Wednesday highlighted that senior Chinese diplomats in the US must receive federal approval to visit local government officials and university campuses.
On a year-to-date basis, foreign funds have taken out -RM20.89 billion net of local equities, exceeding the -RM19.49 billion foreign net outflow in 2015.
Malaysia, in comparison with ASEAN peers, namely Thailand, Indonesia and the Philippines, has the second-largest foreign net outflow after Thailand which registered a year-to-date foreign net outflow of -US$8.16 billion.
The markets were closed on Aug 31, 2020, for the National Day (Merdeka) public holiday.