Capital Inflows Target Malaysian Plantation, Tech, and Telco Sectors
In a focused analysis of capital movement, the Malaysian stock market saw the plantation, tech, and telco sectors emerge as the clear leaders in attracting net foreign inflows for the reporting week.
The plantation sector topped the list, drawing in a substantial RM151.2 million, demonstrating continued international confidence in Malaysia’s core commodities.
Closely following, the technology sector recorded healthy net inflows of RM89.7 million, underscoring the ongoing global appetite for regional technology stocks despite broader market volatility.
The telecommunication (telco) sector, while lower than the other two, still registered a positive net inflow of RM5.7 million.
Conversely, the market saw significant foreign outflows in several other sectors, led prominently by financial services, which recorded a massive net outflow of -RM513.7 million.
This was followed by the healthcare sector, seeing -RM192.8 million in outflows, and the utilities sector, which recorded -RM162.6 million.
MBSB Investment Bank Bhd (MBSB), in its fund flow report for the week ended October 31, highlighted that this selective capital positioning reflects a strategic move by investors toward defensive and growth-oriented sectors like plantation, tech, and telco.
The continued high inflows into plantation are likely linked to resilient commodity prices, while the strength in tech and telco suggests optimism regarding digitalization trends and infrastructure spending.
Local Institutions Counter Foreign Selling Pressure
The fund flow report by MBSB also detailed the contrasting activities of domestic market participants against the backdrop of foreign movement.
Local institutions extended their pattern of net purchases for the fourth consecutive week, registering robust inflows of RM812.7 million.
This strong domestic institutional buying effectively acted as a significant counterweight to the aggressive net selling by foreign investors.
Simultaneously, local retailers concluded a prolonged period of selling, ending their seventh consecutive week of net selling by recording a positive net inflow of RM72.0 million, signaling a modest return of confidence among smaller, individual investors.
The average daily trading volume (ADTV) for the week experienced a broad-based increase across all investor categories.
Local retailers saw a marginal increase of 1.0 percent, while local institutions recorded a significant surge in activity, posting an increase of 15.4 percent.
Foreign investors also increased their trading volume by 6.1 percent.
Despite the increase in activity across the board, net selling by foreign investors continued for the fourth consecutive week, posting a substantial net outflow of RM884.6 million.
This figure is notably higher than the previous week’s net outflow of just RM14.6 million, indicating a sharp escalation in foreign divestment.
Foreign investors were net sellers on all five trading days last week, with Monday recording the highest net selling activity at RM244.0 million.
The continuous net outflow from financial services, healthcare, and utilities suggests that foreign investors are aggressively reallocating capital, even as the plantation, tech, and telco sectors remain attractive.
Regional Trends Show Selectivity and Policy Impact
On a regional scale, foreign investors exhibited a different pattern, collectively ending a two-week consecutive streak of net selling to record a strong net foreign inflow of US$915.2 million.
This indicates that while foreign capital was exiting Malaysia, it was flowing into other select Asian markets.
Among the markets tracked by MBSB, only three—India, South Korea, and Indonesia—registered net foreign inflows, highlighting the selective nature of regional capital deployment.
The remaining markets recorded net outflows, with Taiwan leading the region with the largest outflow.
India demonstrated exceptional strength, extending its net foreign purchases for the fourth consecutive week and recording the region’s highest net foreign inflows at a remarkable US$826.2 million.
Similarly, Indonesia saw its net buying streak continue for the fourth consecutive week, with foreign purchases totaling US$333.5 million.
This notable increase in Indonesian buying is attributed to the country’s recent introduction of new regulations.
These rules specifically allow the central government to lend to local authorities and state-owned enterprises to finance various development projects.
Such policy initiatives often attract foreign capital by signaling new investment opportunities and a government commitment to growth.
This regional disparity underscores how country-specific economic policies and sector-specific opportunities, like those in plantation, tech, and telco in Malaysia, continue to drive the dynamic movement of global capital across Asian equity markets.
