Kuala Lumpur, March 6 – As foreign investors continue to withdraw from the Malaysian stock market, their shareholding proportion has dropped to below 20%. According to a report by Galaxy International, foreign investors have sold off Malaysian stocks for five consecutive months.
In February, the average daily trading value on Bursa Malaysia fell 4.4% month-on-month to RM2.5 billion, while the average daily trading volume dropped 2.5% month-on-month and 14.2% year-on-year to 3 billion shares. Although the Composite Index rose by 1.14% in February, the Main Market’s market capitalization shrank by 2.4% month-on-month to RM1.865 trillion, reflecting continued market weakness.
In terms of trading value, foreign investor participation increased by 4.0% month-on-month to 42.5% in February, close to the record high of 42.6% set in September last year. The reason for this “active” participation was that foreign investors were aggressively selling off Malaysian stocks. At the same time, local institutional investors, retail investors, and nominee accounts all saw a decline in market participation. Local institutional investors recorded the largest decline, down 2.4% month-on-month to 28.3%. Local retail investor participation fell 0.6% to 19.1%. Nominee account participation dropped 1% month-on-month to 10.1%.
Galaxy International pointed out that since the introduction of the U.S. advanced chip control regulations on January 13, foreign investors have adopted a risk-averse approach toward data center and AI-related stocks. This was further exacerbated by Microsoft’s cancellation of a U.S. AI data center lease on February 24, adding more selling pressure to the market. Additionally, weaker-than-expected earnings and outlooks for Malaysian glove and technology stocks were also key reasons for the foreign capital outflow.
“As of February this year, foreign investors have been net sellers of Malaysian stocks for five consecutive months. This is the first time since March 2020 that foreign investors have withdrawn more than RM10 billion in just five months.” Statistics also show that since 2010 (up to February 2024), foreign investors have cumulatively net sold RM43.9 billion worth of Malaysian stocks, marking a historical record.
As a result, the proportion of foreign ownership in Malaysian stocks has now fallen to 19.4%, the lowest since May 2010, when it stood at 20.3%. It is important to note that Galaxy International’s data only covers transactions up to February 28. Foreign investors continued to sell Malaysian stocks aggressively in the first week of March, putting further pressure on the market.
According to Bursa Malaysia statistics, foreign investors continued to sell off Malaysian stocks in the first three trading days of March (March 3–5). As of year-to-date, foreign capital outflow has already reached RM5.741 billion, approaching the RM6 billion mark.
This post has been edited by premier239: Mar 6 2025, 07:10 PM
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