KUALA LUMPUR (Jan 11): Bursa Malaysia said trading activities in the exchange-traded fund (ETF) space experienced a sharp contraction in December 2022 with total value traded contracted by 76% to RM8.54 million from its year-to-date (YTD) peak of RM35.09 million in November 2022.

In terms of ETF volume traded, it contracted by 86% month-on-month (m-o-m) in December 2022 to 3.8 million units, down from 26.62 million units in November 2022, according to the ETF performance report prepared by Bursa Digital Research.

Bursa said the contraction was principally led by ABF Malaysia Bond Index Fund (ABFMY1) with total value down by RM27.19 million m-o-m and volume fell by 23.64 million units m-o-m after a one-off direct business transaction on Nov 16, 2022.

This has brought the YTD total value to RM123.45 million and volume traded to 62.80 million units. However, in December 2022, excluding direct business transactions, total market value improved by 7.4% m-o-m while volume traded improved by 25.6% m-o-m, making it the highest trading level since April 2022, it said.

Bursa said the six China-centric ETFs saw their combined value traded moderated by 21% m-o-m to RM3.05 million (November: RM3.85 million) as key China equity indices retraced amid concerns over Covid-19 outbreaks in China outweighing market optimism from the announcement of borders reopening towards the end of the month.

“Within this theme, the Tradeplus S&P New China Tracker-MYR (CHINAETF-MYR) and VP-DJ Shariah China A-Shares 100 ETF – MYR (CHINA100-MYR) were among the most traded by value and volume in December and YTD,” it said.

Bursa added that trading in Tradeplus Shariah Gold Tracker (GOLDETF) picked up further, led by the increase in gold prices since November 2022 with its net asset value increased by 1.9% m-o-m.

For ETF fund flow highlights, Bursa said foreign investors remained as the largest net sellers of ETFs YTD after two consecutive months of net sold in December 2022

Meanwhile, it said local nominees turned net sellers in December 2022 after three consecutive months of net buying.

“This brought the YTD net inflows to RM30.27 million, mainly led by ABFMY1 (RM26.95 million),” Bursa said.

Besides, Bursa said combined asset under management (AUM) in December 2022 slightly moderated to RM2.09 billion (-1.9% m-o-m) after two consecutive months of growth, in line with lower AUM of Shariah equity, fixed income and leveraged and inverse ETFs.