Foreign fund outflows surge to RM2.83 billion in May

Foreign investors significantly increased their selling of Malaysian equities in May, leading to a substantial surge in fund outflows to RM2.83 billion. This marks a reversal from April's net buying of RM528.1 million, with May's net selling reaching RM2.29 billion.

This heightened outflow has shifted the year-to-date foreign fund flow into a net deficit of RM590.2 million as of May 29, erasing all previous inflows. According to Kenny Yee Shen Pin, Head of Research at Rakuten Trade, the political uncertainty during May prompted a cautious sentiment among foreign investors.

Despite the significant foreign selling pressure, domestic institutions have continued to be the primary market supporters. They recorded a net buying of RM2.62 billion for the period of January to May 2026. This consistent support from local institutions has helped mitigate the impact of foreign sales and maintained the stability of the index.

Retail investors, however, still registered a net outflow of RM2.03 billion during the same period. While there was a slight improvement in sentiment in May with net buying of RM484.1 million, their overall confidence has not fully recovered. The article also notes that foreign shareholdings in the market remained stable at around 19 percent, suggesting that long-term foreign investors are maintaining their positions despite short-term trading activities.