Foreign investors continued to offload Malaysian equities in the April 20-23 period, with net selling almost doubling to RM889.62 million against RM456.09 million in April 13-16 as risk appetites were dampened by weak market sentiments following the slump in oil prices.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul said Monday proved to be a turbulent day as the May contract for West Texas Intermediate (WTI), one of the three benchmarks indices for crude oil, fell to -US$37.63 per barrel as speculators rushed to close their open position.
“At the same time, economic indicators were primarily business sentiments as indicated by the Purchasing Managers Index (PMI) which had been declining in the advanced countries in April, ” he told Bernama.
Meanwhile, local retails recorded a net buy of RM484.79 million with an average participation of 35.85 per cent during the April 20-23 period, compared with a net selling of RM96.75 million with an average participation of 32.9 per cent from April 13-16.
Local institutions remained as the net buyer in the Malaysian equity market during the period under review at RM404.64 million against RM442.22 million previously.
For the upcoming week, Mohd Afzanizam said market participants would continue to be preoccupied with weak economic data.
The United States (US) would announce its first quarter gross domestic product results on April 29, with numbers expected to contract by 4.1 per cent based on consensus estimates.
The US Federal Open Market Committee (FOMC) members would reconvene on April 28-29, so the market would be anticipating its assessment in light of the possible reopening of the economy in certain jurisdictions, Mohd Afzanizam said.
“China, too, will release its PMI index data. This week we saw PMI indices across advanced economies collapsing, so businesses are likely to refrain from expanding.
“In that sense, the FTSE Bursa Malaysia KLCI (FBMKLCI) next week will continue to be very guarded, ” he said.
On the local front, the government has announced the extension of the Movement Control Order by another two more weeks to May 12, albeit with more economic sectors set to reopen gradually.
The number of active COVID-19 cases has been stabilising, falling to 1,882 as of April 25 from 2,057 on April 19.
“The country is moving in the right direction and the economy would eventually reopen.
“So the market will be on the lookout in order to gauge the strength of the domestic demand, going forward, ” Mohd Afzanizam added.