Kuala Lumpur, August 25, 2025 – Foreign investors continued to pare down their holdings on Bursa Malaysia for a seventh consecutive week, extending the net outflow trend that has weighed on market sentiment. According to MIDF Research, the week saw total foreign net selling of RM314.4 million, underscoring persistent caution among offshore funds despite selective sector interest.
Trading began with significant foreign withdrawals early in the week, with Monday registering RM152.9 million in net selling. This was followed by RM74.8 million on Tuesday and a sharper decline of RM209.4 million on Wednesday, marking the heaviest daily outflow of the week. Activity eased on Thursday with a smaller withdrawal of RM54.6 million before sentiment briefly reversed on Friday, when foreign investors returned with a net inflow of RM177.2 million. While the late-week rebound provided some relief, it was not enough to offset the broader trend of sustained foreign selling.
Sector flows revealed a more nuanced picture. Offshore funds channelled capital into several key industries, led by industrial products and services, which attracted RM136.7 million. Construction counters also saw strong foreign buying of RM133 million, while the plantation sector benefited from inflows of RM56.8 million. However, these gains were eclipsed by heavy outflows from telecommunications and media stocks, which recorded a net foreign sell-off of RM154.2 million. Consumer products and services experienced withdrawals amounting to RM145.2 million, while financial services saw RM119.8 million in foreign outflows.
Domestic investors, particularly institutional funds, emerged as the main counterbalance to foreign selling pressure. Local institutions posted net inflows of RM391.8 million, marking their fourth straight week of net buying and reflecting continued confidence in the resilience of selected sectors. In contrast, local retailers extended their selling streak for a second week, pulling out RM77.3 million.
Trading volumes also pointed to increased activity across the market. Average daily volumes among foreign investors rose by 10 per cent, while domestic institutional participation grew by 14.5 per cent. Retail investors also recorded an 8.6 per cent increase, indicating heightened market engagement despite the mixed directional flows.
The extended period of foreign withdrawals highlights ongoing risk aversion linked to global market uncertainties. Nonetheless, the targeted foreign inflows into industrial, construction, and plantation stocks suggest that offshore investors are rotating exposure rather than abandoning Malaysian equities altogether. Domestic institutional buying has provided a buffer, preventing steeper declines and offering stability as foreign funds reassess their positions.
Looking forward, the Friday inflow could hint at the possibility of a short-term stabilisation if sentiment improves. Much will depend on external factors, particularly developments in the United States and China, which continue to shape risk appetite across Asia. Domestically, earnings announcements and policy updates could further influence sectoral performance. If foreign selling begins to ease and domestic support remains strong, Bursa Malaysia may see a tactical recovery in the weeks ahead, especially in sectors where structural demand is expected to remain resilient.
