Foreign investors still actively trading on Bursa

KUALA LUMPUR (BERNAMA) – International investors are still actively trading on Bursa despite the lingering political jitters based on the average daily traded value (ADTV) on a four-day basis from Monday to Thursday which remained at MYR1.5 billion.

Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said it was worthwhile to note that the ADTV of foreign investors had stayed above the MYR1 billion mark for the past 17 consecutive weeks.

However, the volatile trading throughout the week, led international investors to dispose of MYR177 million net of total equities from Monday to Thursday, more than double the net outflow of MYR86 million recorded in the same period last week.

Adam said this brought the year-to-date foreign net outflow from Malaysia to MYR22.75 billion.

“The week began with a positive mood as international investors snapped up MYR101.6 million net of local equities on Monday.

“The risk-on sentiment on Monday was mainly fuelled by (news of) China’s gross domestic product which expanded 4.9 per cent in the third quarter of 2020 from a year ago, keeping the economy on track to be the world’s only major growth engine and validating Beijing’s aggressive approach to controlling the pandemic,” he told Bernama.

Aside from that, he said, the recent spike in COVID-19 cases especially in Malaysia led to some buying interest in healthcare-related stocks, particularly Hartalega and Top Glove which advanced by over three per cent on Monday, October 19.

“International funds, however, turned sellers on Tuesday at a tune of MYR134.8 million amid fears of oversupply in the oil market.

“Top Glove and Hartalega both dropped by over six per cent on Wednesday as investors took profit following the recent rally and fresh progress in the development of the COVID-19 vaccine.

“Therefore, it was no surprise that the Bursa Malaysia Healthcare Index led laggards with a 3.7 per cent decline on Wednesday,” he said.

On Thursday, offshore investors made a modest comeback to Bursa by acquiring MYR18.9 million net of local equities, he noted.

“This was despite United States (US) President Donald Trump’s accusation that Democrats were unwilling to craft an acceptable compromise on the stimulus package.

“It remains unclear whether stimulus negotiations would continue ahead of the US presidential and congressional elections on November 3,” he said.

For the week just ended, the local bourse mostly moved in the red zone influenced by Wall Street’s performance which was driven by unclear stimulus package as well as due to the rising political unease and global resurgence of COVID-19 cases.

On Friday, the FTSE Bursa Malaysia (FBM KLCI) eased 4.16 points to 1,494.64 from the previous day’s close of 1,498.80, with the volume rising to 6.92 billion units worth MYR4.1 billion from 6.73 billion units worth MYR4.6 billion recorded on Thursday.

On next week’s forecast, Adam said the foreign net outflow was expected to persist in light of the uncertainty on Malaysia’s political front and also external pressures such as the upcoming US presidential election.

On the corporate front, the Malaysia Aviation Group offered an early retirement plan to employees aged 45 and above who have served the company continuously for a minimum of 10 years, including years of serving in the Malaysia Airlines group.