KUALA LUMPUR, Jan 11 — Foreign investors became net sellers in the first week of 2021 from January 4-8, 2021, with net outflow of RM336.9 million from RM8.6 million bought in the preceding week.

Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said Bursa Malaysia witnessed a bloodbath on the first trading day of the year as international investors dumped RM852.5 million net of local equities today.

"This was in fact the largest foreign net outflow in a day since February 6, 2018 when offshore funds withdrew RM868.7 million net of local equities from Bursa Malaysia,” he told Bernama.

He said perhaps the lifting of the ban on short selling contributed to Monday’s sell-off, especially in rubber glove counters such as Top Glove, Hartalega and Supermax — all declined by more than 5.0 per cent on the same day, dragging the Bursa Malaysia Healthcare Index by 4.3 per cent.

"Consequently, the FBM KIC index settled 1.5 per cent lower on Monday at 1,602.6 points, bucking the trend of regional peers such as South Korea’s KOSPI index and China’s CSI 300 index which ended up by more than one per cent,” he added.

Adam said there were speculations of tighter movement restrictions to be announced by the government later today, coupled with some political turbulence surrounding the ruling coalition.

"These negative vibes were somewhat cushioned by the positivity that a Democrat-controlled Senate in the US will clear the path for US President-elect Joe Biden to have bigger fiscal spending to stimulate the pandemic-ravaged economy,” he said.

Malaysia experienced the largest outflow last week compared with its Asian peers, namely South Korea, Taiwan, India, Thailand, Indonesia, and the Philippines. For comparison, South Korea and Taiwan recorded weekly foreign net outflows of US$841.5 million and US$2.7 billion, respectively.

MIDF Amanah Investment Bank Bhd, in a research note, said foreign investors were only net sellers on Monday and Wednesday with combined outflow of RM950.9 million.

It said the total inflow did not manage to reverse the selling momentum last week.

"The largest foreign inflow was recorded on Friday (January 8) at RM435.5 million and the smallest inflow on Tuesday (January 5) at only RM41.78 million,” it added.

The research house said retailers were active buyers except on Tuesday and Friday, with the largest net inflow registered on Monday and the smallest on Wednesday, to the tune of RM493.30 million and RM86.69 million, respectively.

"It was opposite for local institutions, where the market saw local institutions as net sellers except on Monday and Wednesday, with the largest net selling recorded on Friday at RM428.8 million and largest net buying on Monday at RM359.2 million.

"Overall, for the first week of 2021, retailers finished strong as net buyers at RM699.7 million, while local institutions and foreign investors were net sellers at RM362.6 million and RM337.0 million, respectively,” it added.

In terms of participation, it said the retail investors recorded a weekly decrease of 19.4 per cent in average daily trade value (ADTV), while the foreign investors and local institutions experienced declines in ADTV of 108.6 per cent and 108.6 per cent, respectively. — Bernama