This article first appeared in The Edge Financial Daily, on November 17, 2015.

KUALA LUMPUR: Global equity markets reverted to the historically subdued November mood last week after a promising start to the month, as prices lost traction and slid in most markets, said MIDF Research.

“On Bursa, foreign investors’ trading pattern reflected broader regional trend. Marginal buying the week before turned heavy selling last week. It was a case of foreign attrition every single day last week,” said MIDF Research head Zulkifli Hamzah in his weekly fund flow report yesterday on the week that ended on Nov 13.

The selling was the heaviest in seven weeks, despite the holiday break last Tuesday, he said; in aggregate, foreign funds offloaded RM714 million, net of purchases, in the open market last week.

This means year to date (YTD) in 2015, foreign funds have offloaded RM18.2 billion Malaysian equities, compared with RM6.9 billion for the entire 2014, he noted.

“On Monday (last Monday), foreigners sold lightly ahead of the holiday on Tuesday (last Tuesday). The real bearish intent was borne out when the market reopened on Wednesday (last Wednesday) when foreign funds offloaded RM274.5 million, the 51st time that the daily outflow exceeded the RM200 million mark,” he said.

Zulkifli said selling continued last Thursday, albeit moderately, but the attrition turned intense last Friday, as foreign investors sold RM321.5 million, the 16th highest in a day and the 52nd time it exceeded RM200 million in 2015.

He added that the general foreign activity in the market continued to dwindle, but with big swings in trading activity day to day that suggest lumpy trades.

“Last week (two weeks ago), foreign participation rate (i.e average daily gross volume) remained below the RM1 billion mark for the third consecutive week at RM894 million. The average was RM847 million the week before (three weeks ago). “Meanwhile, local institutions supported the market, mopping up RM608 million on a still active RM2.2 billion participation rate,” he noted.

The retail market was still vibrant two weeks ago. “Despite the retracement in the prices of small caps, retail players mopped up RM106.1 million, the highest in seven weeks,” he said.

Zulkifli said this reflected plenty of bargain-hunting activities, adding that trading was relatively active with participation rate at RM885 million.

Regionally, Zulkifli said the buying in early November turned out to be transient as global funds exited Asian stocks again last week and this time around, the rate of attrition was severe and across the board.

Investors classified as “foreign” offloaded US$2.72 billion (RM11.91 billion) net in the seven Asian stock markets (Thailand, Indonesia, the Philippines, South Korea, Taiwan, India and Malaysia) that MIDF Research tracks; it was “the heaviest outflow since September”.

“Events in Paris over the weekend mean the mood will turn acidic this week. The feared November jinx is turning into reality yet again.

“Geopolitical risks have just risen through the roof, compounding an already fragile sentiment in the equity market. Investors should be bracing for a period of heavy selling in the days ahead,” he said of the global markets.

The recent “mini rally” in the dollar, during which the trade-weighted greenback rose by less than 4%, fizzled last week.

“The weakening US dollar put pressure on commodity prices in general. The price of Brent crude fell below US$45 per barrel last Thursday, the first time the support level was broken since August. It was last traded at US$44.47 per barrel on Friday (last Friday),” he added.