Foreigners short RM631m to local shares on lira fears

The year-to-date outflow from Malaysia was RM8.6b from last Friday


foreign investors sold RM631.4 million in Bursa shares last week, after two weeks of buying.

MIDF Amanah Investment Bank Bhd & # 39; s fund flow report yesterday noted that foreign funds started selling early in the week when the Turkish lira declined and left its influence on emerging markets (EMs).

"The offshore investors were already selling a lot for RM142.3 million net last Monday, while the crisis in Turkey raged over the EM & # 39; s, including Malaysia.

"It came as no surprise that local stocks with exposure to Turkey, such as Malaysia Airports Holdings Bhd (MAHB) and IHH Healthcare Bhd, were important coverage that day," the investment bank report noted.

The level of the foreign net loss, however, fell on Tuesday and Wednesday to RM127.1 million and RM85.4 million respectively when the Turkish lira rebounded from the enormous decline last Monday.

"The FTSE Bursa Malaysia KLCI followed the example of continuing on those two days, while other regional markets, such as Thailand and Hong Kong, were in the red in the same period," he said.

Foreign sales were gradually accelerated for the remainder of the previous week following the news that the US and China will resume trade talks by the end of August, coupled with the weaker growth of the gross domestic product (GDP) of Malaysia of 4.5% for the second quarter of 2018 (2Q18).

"Sales were contributed by Malaysia's announcement of lower-than-expected GDP growth of 2Q18 of 4.5% compared to market expectations of 5.2%," said MIDF.

As of last week, MIDF registered the month of August with a net foreign outflow of RM128.6 million.

The year-to-date outflow from Malaysia came to RM8.6 billion from Friday, it said.

The participation of foreign investors is encouraging: the weekly average daily traded value (ADTV) reached above RM1 billion for 31 of the 33 weeks.

"The weekly ADTV of the retail market and local institutional funds also remained healthy above RM800 million and RM2 billion respectively, despite the decline last week," he said.

United Plantations Bhd was the largest beneficiary of the net cash inflow, raking in RM10.9 million, while CIMB Group Holdings Bhd saw RM9.64 million net inflow and Top Glove Corp Bhd with RM7.99 million.

Malayan Banking Bhd saw last week the largest net cash outflow with RM22.09 million, followed by MAHB and Genting Bhd with outflows of RM21.88 million and RM15.18 million respectively during the week, the report said.

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