KUALA LUMPUR: Malaysia has seen foreign investors net sell a considerable amount of local equities so far this year, but it is not the worst in Asean in terms of fund outlow from the regional stock markets.
Foreign investors had withdrawn US$1.65 billion from Thailand, US$520 million from the Philippines and US$420 million from Malaysia year-to-date (YTD) till end-March, according to Maybank Investment Bank Group (Maybank IBG).
"At US$300 million, foreign net sell of Malaysian equities in March 2023 was the third largest across Asean. Foreign investors were also net sellers of Thailand (-US$920 million) and the Philippines (-US$500 million) equities in March 2023.
"They were net buyers in Indonesia (US$270 million) and Vietnam (US$120 million) during the month. YTD, they added US$450 million in Indonesia and US$250 million in Vietnam," Maybank IBG noted.
The group said for Malaysia, the total foreign net buy/(sell) value for 12 months to March 2023, as a percentage of market value, was -0.3 per cent compared to 0.0 per cent in February 2023.
Foreign holding of Malaysian equities stood at 20.2 per cent end-March 2023 (end-February: 20.4 per cent).
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 per cent at end-September 2022: strategic investors – 14.13 per cent, non-strategic and active investors – 3.83 per cent, non-strategic, passive – 2.62 per cent.
By geography, 43.99 per cent of the non-strategic investors were from the US (their top three holdings were in the banks), 14.8 per cent from the UK, 13.12 per cent from Singapore, 7.46 per cent from Norway and 3.34 per cent from Hong Kong.
Maybank IBG said foreign investors exited the Malaysian equity market for the seventh consecutive month in March 2023, at a sizeable RM1.35 billion net (February: -RM0.17 billion), with almost all the selling occurring in the first 14 days.
The last time that foreign selling was of this size was in December 2022 at RM1.36 billion. This brought their cumulative net sell for 2023 YTD to RM1.87 billion.
Domestic institutions bought RM1.28 billioon in March (February: RR0.26 billion), lifting their net buy for the YTD to RM1.77 billion.
Retail investors bought RM0.07 billion in March (February: RM0.43 billion), bringing their net buy for the YTD to RM0.11 billion.
Trade participation foreign investors was higher MoM at 26.2 per cent (February: 25.3 per cent); DI was 46 per cent (February: 47.3 per cent) and retail was 27.8 per cent (February: 27.4 per cent).
On the ringgit bonds, Maybank IBG said despite global bond selloffs, ringgit bonds buck the trend with a surprisingly large RM4.3 billion inflow in February 2023 (January: RM0.5 billion), the largest monthly inflow since August 2022.
This raised the total foreign holdings to RM251.5 billion (January: RM247.3 billion), which was the highest since September 2022.
By debt instrument, inflows were driven by MGS (RM4 billion) and GII (RM1 billion) while discount instruments (-RM0.3 billion) and PDS (-RM0.4 billion) posted continued outflows.
The foreign share of MGS was unchanged at 34.5 per cent (January: 34.5 per cent) while that of MGS and GII increased slightly to 22.4 per cent (January: 22.3 per cent).
© New Straits Times Press (M) Bhd
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