March Saw A Whopping RM1.35 Billion In Equity Sell-Off By Foreign Investors

Foreign investors exited Malaysia equities for the 7th consecutive month in Mar 2023, at a sizeable MYR1.35b (net) (Feb: -MYR0.17b), with almost all the selling occurring in the first 14 days. Maybank IB said the last time that foreign selling was of this size was in Dec 2022, at MYR1.36b. This brought their cumulative net sell for 2023 YTD to MYR1.87b.

Meanwhile, domestic institutions (DI; plus nominees) bought MYR1.28b in March (Feb:-MYR0.26b), lifting their net buy for the YTD to MYR1.77b. Retail investors also bought MYR0.07b in March (Feb: +MYR0.43b), bringing their net buy for the YTD to MYR0.11b (Fig 5). Trade participation (ex-DBT) by foreign investors was higher MoM at 26.2% (Feb: 25.3%); DI was 46% (Feb: 47.3%) and retail was 27.8% (Feb: 27.4%) (Fig 6, 7, 8).

There was foreign selling in Thailand and Philippines too, across ASEAN, foreign investors were also net sellers of TH (-USD0.92b) and PH (-USD0.5b) equities in Mar 2023; buyers of ID (+USD0.27b) and VN (+USD0.12b) (Fig 11, 13). At USD0.3b, foreign net sell of MY equities in Mar 2023 was the 3rd largest.

YTD, foreign investors withdrew USD1.65b from TH, USD0.52b from PH and USD0.42b from MY; added USD0.45b in ID and
USD0.25b in VN. For MY, the total foreign net buy/(sell) value for 12M to Mar 2023, as % of market value, was -0.3% (Feb 2023: +0.0%).

Strategic vs. non-strategic foreign holding
Foreign holding of MY equities was 20.2% end-Mar 2023 (end-Feb: 20.4%). The Securities Commission’s Capital Market Stability Review 2022 report breaks down the composition of foreign investors based on market foreign holding of 20.58% at end-Sep 2022: (i) strategic investors – 14.13%, (ii) non-strategic, active investors – 3.83%, (iii) non-strategic, passive – 2.62% (Fig 10). By geography, 43.99% of the non-strategic investors were from the US (their top 3 holdings were in the banks), 14.8% from the UK, 13.12% from SG, 7.46% from Norway, and 3.34% from Hong Kong.

Over at MYR bonds in February
Despite global bond selloffs, MYR bonds buck the trend with a surprisingly large MYR4.3b inflow in Feb 2023 (Jan: +MYR0.5b; Fig 18), the largest monthly inflow since Aug 2022. This raised the total foreign holdings to MYR251.5b (Jan: MYR247.3b), which was the highest since Sep 2022. By debt instrument, inflows were driven by MGS (+MYR4b) and GII (+MYR1b) while discount instruments (-MYR0.3b) and PDS (-MYR0.4b) posted continued outflows. The foreign share of MGS was unchanged at 34.5% (Jan: 34.5%) while that of MGS+GII increased slightly to 22.4% (Jan: 22.3%).

Positive portfolio flow in February
Offsetting the MYR0.2b outflow from MY equities in Feb 2023, the total portfolio flow was +MYR4.1b. This brought cumulative portfolio flow for Jan-Feb 2023 to +MYR4.2b (2022: -MYR5.4b;

Previous articleWith New Government Firmly Behind DNB Led SWN Model, Telco’s Move Forward
Next articlePositioning Malaysia as a Strategic Gateway to ASEAN: Proposal, Challenges and Opportunities

LEAVE A REPLY

Please enter your comment!
Please enter your name here