KUALA LUMPUR: Foreign funds remained as net sellers on the local equities market as investors weighed the rising possibility of a recession in the United States (US).
Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid as quoted in Bernama said foreign net outflow stood at RM581.1 million, from Sept 30-Oct 3, compared with RM13.6 million on Sept 23-26.
According to Afzanizam, weak economic numbers coming from the US which fell to 47.8 points in September has renewed fears of a recession in the US, which then led to greater demands for safe-haven instruments such as the US Treasury securities, which fell significantly to 1.52 percent from above 1.6 percent previously.
He said this fear caused foreign investors to be cautious in the global market with a risk-off mode, which has subsequently taken a serious toll on the Malaysian equities market.
Afzanizam said average foreign participation in Bursa Malaysia declined to 26.43 per cent this week compared with 29.57 per cent recorded on Sept 23-26.
He added the FTSE Bursa Malaysia (FBM KLCI) next week is expected to trade range bound as the market will be waiting for the outcome of the trade talks between the US and China.