KUALA LUMPUR (May 29): Foreign selling of Malaysian equity extended for the fifth consecutive week, albeit at a slower pace of RM58.7 million last week, from RM211 million the prior week.

In his weekly fund flow report on Monday (May 29), MIDF Research’s Royce Tan Seng Hooi said foreign investors net bought RM10.0 million on Monday (May 22) and RM42.6 million on Friday (May 26), but were net sellers from Tuesday (May 23) to Thursday (May 25).

He said foreign investors have been net sellers for 15 out of 21 weeks this year, with a total net foreign outflow of RM2.45 billion.

“The top three sectors that saw net foreign inflows were Transportation & Logistics (RM103.8 million), Technology (RM58.6 million), and Telecommunication & Media (RM50.4 million), while the top three sectors that saw net foreign outflows were Financial Services (RM122.8 million), Consumer Products & Services (RM68.3 million), and REITs (RM21.9 million).

“Local institutional investors turned net sellers last week at -RM32.4m (million), after four weeks of net buying. They only net bought on Tuesday at RM29.1m and net sold for the rest of the week. Year to date, they have been net buyers for 15 out of 21 weeks, with a total net buy of RM2.41 billion,” he said.

Tan said local retailers turned net buyers at RM91.1 million last week, after three weeks of net selling.

“Every trading day was a net buying day except on Friday, with a net sale of RM4.5 million.

“Year to date, local retailers have been net buyers for 10 out of 21 weeks. The total net buying year-to-date amounted to RM39.9 million,” he said.

Tan said in terms of participation, there was an increase in average daily trading volume (ADTV) across the board — retailers (+1.4%), local institutions (+12.6%) and foreigners (+18.2%).

Commenting on the international scenario, Tan said major markets saw a mixed trading week, as investors continued to track the United States’ debt ceiling negotiation ahead of the June 1 deadline.

He said US President Joe Biden and US House Speaker Kevin McCarthy eventually reached an agreement in principle on Saturday (May 27), to lift the debt limit for two years and cap government spending.

“Market movements at the end of the week were somewhat hampered, on the back of a stubborn inflation data. The core personal consumption expenditures (PCE) price index, which is the Federal Reserve’s preferred inflation gauge, rose to +4.7%y-o-y (year-on-year) in Apr-23 (Mar-23: +4.6% y-o-y), raising possibilities of another rate hike.

“The CME FedWatch Tool indicated a 64.2% probability of a 25bps hike in the June meeting.

“ Out of the 20 major indices that we track globally, 12  finished in the red last week, with Hong Kong’s Hang Seng Index being the worst decliner at 3.62%, followed by the CSI 300 (-2.37%) and the CAC 40 (-2.31%).

“The top three advancers were the Nasdaq Composite Index (+2.51%), Taiwan’s Taiex (+2.04%) and India’s Sensex (+1.25%) on the back of a tech-driven rally, with the optimism of the potential growth in the artificial intelligence space (AI),” he said.