KUALA LUMPUR: Foreign investors continued to withdraw from Bursa Malaysia with the amount of outflow almost doubling to RM700.2 million from Monday to Thursday last week from RM422.2 million registered in the same period a week earlier.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the outflow was driven by the wait-and-see attitude adopted by investors as the global markets were weighed by uncertain external development, especially the US-China trade negotiations.
“Average participation rate for foreign and local retail stood at 27.07% and 26.3% respectively, against 32.99% (foreign institutions) and 25.3% (local retail) in the same period last week,” he told Bernama.
However, further selling was capped by net buying by local institutions of RM687.1 million (RM336.5 million last week), with the average participation at 46.65% (41.71% last week).
The fall in share prices of companies has opened up the opportunity for local institutional investors to increase their holdings, while at the same time stabilising the stock prices on the local exchange, he added.
For the week, Bursa Malaysia was spooked after US President Donald Trump indicated that he is no rush to sign the trade deal with China and might sign it in the run-up to his election campaign. He has ruffled feathers of other nations as well, resulting in further fears among the investors.
Meanwhile, the ringgit performance over the week was mainly influenced by the increasing oil price as well as the ongoing US-China trade talks.
FXTM market analyst Han Tan said investors would remain sensitive to any news reports pertaining to the US-China trade deals as they count down the days to Trump’s Dec 15 deadline on a scheduled tariff imposition on Chinese goods.
He said more signs of an imminent phase one trade deal could translate into further gains for Asian currencies.
“However, should investors get the sense that more trade tariffs are on the horizon, that would deal a significant blow to risk appetite,” he said.
Among the economic and corporate developments that made the headlines this week was the announcement by Prime Minister Dr Mahathir Mohamad that Malaysia will embrace all challenges to ensure that the Asia Pacific Economic Cooperation (Apec) 2020 is a success.
Meanwhile, Petronas Dagangan Bhd has appointed a new managing director and chief executive officer,Azrul Osman Rani, effective Jan 1, 2020, to replace Syed Zainal Abidin Syed Mohd Tahir.