Foreign funds snap four-week selling streak on Bursa

PETALING JAYA: Offshore investors made a modest return to Bursa last week as foreign investors snapped up RM184.6 million net of local equities compared with a RM276.6 million outflow in the previous week, after four straight weeks of sell-off, according to MIDF Research.

It said the local bourse saw a moderate foreign net outflow of RM10.7 million on Monday supported by the positive sentiments from the agreement between Washington and Beijing on the outlines of a partial trade accord as well as the Malaysian Budget 2020.

Foreign net selling inched higher to RM21.3 million as investors searched for further signs of a concrete trade deal to sustain their optimism.

However, Wednesday saw the highest foreign buying during the week as offshore investors accumulated RM187.1 million net of local equities, leading the local bourse to close 0.6% higher at a two-week high of 1,574.9 points.

“Investors cheered China’s US$28 billion cash injection into its financial system while Hong Kong unveiled measures to bolster growth.”

MIDF said the foreign inflow continued on Thursday at a pace of RM107.9 million despite the weak US retail sales that added to expectations of interest rate cuts by the US Federal Reserve.

However, it noted that the mood turned sombre on Friday as foreign investors sold RM78.3 million net of local equities as China reported the slowest economic expansion in nearly three decades on weaker investments and factory output.

So far in October 2019, foreign funds have taken out RM790.4 million net of local equities from Bursa.

Meanwhile, on a year-to-date basis, international investors have sold RM8.69 billion worth of local equities from Bursa, making up 74.3% of last year’s foreign net outflow of RM11.69 million.

In terms of participation, foreign investors saw the largest increase in average daily traded value of 43.6% to reach above the RM1 billion mark for the first time in four weeks.

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Oil ebbs as China’s slowest GDP growth in almost 3 decades stokes demand fears

SEOUL: Oil prices slid on Friday on jitters over demand from China after the world’s largest oil importer recorded its weakest quarter of economic growth in nearly three decades, dragged down by a trade dispute with the United States.

Global benchmark Brent crude oil futures fell by 21 cents, 0.4%, to $59.70 a barrel by 0646 GMT.

U.S. West Texas Intermediate (WTI) crude futures edged down by 4 cents, or 0.1%, to $53.89 per barrel.

In the third quarter, China’s gross domestic product (GDP) growth slowed to 6% year-on-year, its weakest pace in 27-1/2 years and below expectations, dogged by soft factory production amid ongoing trade tensions with United States and sluggish domestic demand.

“The (China) GDP print has weighed on short-term sentiment and we have seen regional stock markets and oil contracts edge lower because of that,“ said Jeffrey Halley, senior market analyst for Asia Pacific at brokerage OANDA.

Crude demand growth tends to track economic growth trends, but Halley said China’s need for oil would not recede any time soon.

Underlining that view, Chinese official data released on Friday showed robust refinery throughput in September, rising 9.4% from a year earlier to 56.49 million tonnes, on increases from new refineries and some independent refiners resuming operations after maintenance.

“There’s a lot of demand pessimism already priced into the oil markets … China GDP (growth) was not negative enough (below 6%) to alter the positive effects for the trade talks,“ said Stephen Innes, Asia Pacific market strategist at AxiCorp.

U.S. and Chinese trade negotiators are working on nailing down a Phase 1 trade deal text for their presidents to sign next month, U.S. Treasury Secretary Steven Mnuchin said on Wednesday.

Adding to the downward pressure, U.S. crude oil stockpiles surged last week by 9.3 million barrels as refinery output dropped to a two-year low, while gasoline and distillate fuel inventories decreased, the Energy Information Administration said on Thursday.

Elsewhere, the joint technical committee monitoring a global deal to cut output between the Organization of the Petroleum Exporting Countries (OPEC) and partners, including Russia, found compliance with cuts for September stood at 236%, according to four OPEC sources.

“Concerns about softer growth in the demand for oil and doubts about OPEC’s ability to rebalance the market on the current production cut rate will be key drags on prices in the near term,“ ANZ Research said in a note.

OPEC and its allies have agreed to limit their oil production by 1.2 million barrels per day (bpd) until March 2020.

OPEC lowered its 2019 global oil demand growth forecast to 0.98 million bpd, while leaving its 2020 demand growth estimate unchanged at 1.08 million bpd, according to OPEC’s latest monthly report. -Reuters

US manufacturing emerges from recession in Q3: Fed

WASHINGTON: US manufacturing recovered in the third quarter after a bruising start to the year in which President Donald Trump’s trade wars put a major dent in factory output, the Federal Reserve reported Thursday.

But in the month of September alone, overall American industrial production pulled back as the nationwide strike at General Motors assembly plants and cutbacks in crude oil production weighed on output.

The third-quarter manufacturing rebound undid only some of the recent damage, however, with output still nearly one percent below September of last year.

The Fed’s industrial production index — which measures energy generation, mining and oil production as well as manufacturing — fell 0.4 percent in September, a worse result than economists expected.

The decline appeared larger after an upward revision to August, which posted the largest increase in a year.

Even without the month-long GM strike, in which nearly 50,000 workers walked off the job across the United States, output still would have declined 0.2 percent, according to the Fed.

GM and the United Auto Workers this week announced a tentative deal which could put an end to the work stoppage in coming days.

For the latest quarter, US manufacturing rose 1.1 percent, led higher by computers and electronics, autos and appliances, suggesting that the strike had halted healthy momentum in American auto production.

US manufacturing in September outside the auto and auto parts sectors also declined 0.2 percent compared to August, with weakness apparent in production of metals, machinery and electrical appliances as well. -AFP

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