Foreign funds net sellers of Malaysian equities at RM1.12b

Published: Monday August 5, 2013 MYT 1:02:00 PM
Updated: Monday August 5, 2013 MYT 1:04:17 PM
Foreign funds net sellers of Malaysian equities at RM1.12b

KUALA LUMPUR: The last week of July saw foreign funds reducing their shareholdings of Malaysian equities with net selling of RM1.12bil in the open market, MIDF Research reported.

The net selling was the second biggest selldown in a single week for 2013, it said on Monday.

Foreigners were selling every day of the week, with Wednesday marking the high point when RM436.5mil's worth of shares were liquidated. This was in the wake of Fitch's announcement that it was putting Malaysia's rating under negative watch.

Wednesday's foreign selldown was also the year's second biggest after June 21 when the volume was at RM587mil following the sharp overnight fall on Wall Street on persisting fears of the Federal Reserve tapering its monetary stimulus measures.

Prior to last week, foreign money had been steadily flowing into Malaysian equity. As of Friday last week, the cumulative net foreign purchase of Malaysian equity for the year was still at US$4.6bil.

"The overhang of foreign liquidity in the local market is therefore still very high," MIDF Research noted.

"In terms of foreign participation, the rate was still moderate last week. Foreign participation rate (average daily gross purchase and sale) was still below RM1bil at RM985mil.

"This means the foreign selldown in the market was not as widespread as the figure may have implied," it said.

According to the research house, local investors supported the market, snapping up shares selectively.

Retailers were net buyers of RM107mil in Malaysian equities, the second week of buying. Local institutions also supported the market last week, but not aggressively with net buying of RM1bil.