Foreign Funds Sell Malaysian Stocks in Longest Streak Since 2021

The Malaysian stock market has been grappling with a prolonged foreign selling streak, with the longest stretch since 2021. This trend has raised concerns among investors, as foreign funds have been net sellers for 19 out of the past 25 weeks, totaling RM3.83 billion. Local institutions and retail investors, however, have been supporting the market, with net purchases of RM3.45 billion and RM381.6 million, respectively.

The primary reasons behind this foreign selling streak include rising interest rates, geopolitical tensions, and concerns about global economic growth. However, this sell-off differs from previous ones in that it is more broad-based, affecting a wider range of sectors and companies. This suggests that foreign investors are becoming more risk-averse and are pulling back from the market as a whole, rather than focusing on specific sectors or companies.

Despite the foreign selling pressure, local institutions and retail investors have been net buyers in certain sectors. According to MIDF Research, these investors have been net buyers in the healthcare (RM238mil), plantations (RM93.1mil), and industrial products and services (RM72.8mil) sectors. This indicates that local investors are finding value in these sectors and are willing to support the market despite the foreign selling streak.

During this period of foreign selling, local institutions have been net buyers, supporting the Malaysian bourse. Their weekly net inflow reached RM1.06bil, with no outflows recorded. Local retailers, however, have been net sellers, with a weekly outflow of RM299.9mil. The average daily trading volume (ADTV) showed a reduction across all investor categories except local retail investors, who saw an incline of 8.9%.

In conclusion, the foreign selling streak in Malaysian stocks has raised concerns among investors. However, local institutions and retail investors have been supporting the market, finding value in specific sectors. As the market navigates this challenging period, investors should remain vigilant and consider the long-term prospects of the companies they invest in. A balanced portfolio, combining growth and value stocks, can help investors weather market downturns and capitalize on opportunities as they arise.