Foreign selling eases on Bursa Malaysia as local institutions step in

[MALAYSIA] Offshore funds significantly pared down their selling of Malaysian equities last week, with net outflows narrowing to RM330.5 million from a hefty RM1.97 billion in the previous week, according to MIDF Research’s latest weekly fund flow report.

The slowdown in foreign selling coincided with a broader stabilization across regional markets, as investor sentiment showed early signs of recovery amid easing global market volatility. Analysts suggest that the tempered outflows may point to a cautious pause by investors ahead of key economic indicators, such as Malaysia’s forthcoming trade data and inflation reports.

Foreign investors were net sellers on every trading day except Friday, which saw a subdued trading session due to market closures in several major economies in observance of Good Friday. That day, Bursa Malaysia recorded a modest net foreign inflow of RM39.9 million.

The financial services sector experienced the steepest foreign outflow, totaling RM96.6 million, as the industry faces mounting concerns over decelerating loan growth and margin compression. Technology counters also saw significant selling pressure, with RM87 million in net outflows, reflecting global headwinds in the semiconductor space that continue to weigh on Malaysian tech stocks.

According to MIDF, the sectors with the largest foreign withdrawals were financial services (RM96.6 million), technology (RM87 million), and construction (RM80.8 million).

Conversely, telco and media stocks emerged as the top recipients of foreign funds, attracting RM119.5 million in net inflows. This was followed by the consumer products and services sector (RM34.4 million) and property (RM2.45 million).

The influx into telco and media reflects a defensive tilt by investors, as the sector is generally perceived as more stable during volatile periods. Consumer-related counters saw improved buying interest, likely driven by pre-festive season demand, while the slight inflow into the property sector points to measured optimism over selective reopening themes.

Local institutional investors continued to provide crucial support to the domestic market, registering net equity purchases of RM356.2 million — marking the 26th consecutive week of net buying.

Meanwhile, local retailers shifted to net selling after two weeks of net purchases, with RM25.7 million in net outflows. Analysts believe this pullback could signal profit-taking, especially among small and mid-cap stocks that had seen earlier gains. Retail participation is expected to remain cautious in the near term, pending clearer market drivers such as policy updates or improved corporate earnings performance.

Overall market activity declined, with average daily trading volume (ADTV) falling across the board. Foreign investors, local institutions, and retail participants saw volume drops of 48.7%, 56.7%, and 47.2%, respectively.