The stock market came under renewed pressure in June as foreign investors extended their selling streak for a second consecutive month, erasing the FBM KLCI’s gains for the year amid softer market sentiment and pre-election uncertainty, according to CGS International.
In its latest market strategy report, CGS said the FBM KLCI declined 1.1% month-on-month to close at 1,664 points at the end of June, broadly tracking the weakness seen across global and regional equity markets.
The benchmark index performed slightly better than the MSCI Emerging Markets Index, which fell 1.7%, and the MSCI All Country Asia ex-Japan Index, down 1.5%, while matching the S&P 500’s 1.1% monthly decline.
Within the MIST markets — comprising Malaysia, Indonesia, Singapore and Thailand — performance was mixed. Singapore’s Straits Times Index (STI) rose 2.6% while Thailand’s SET Index gained 1.5%, extending their recovery since April. In contrast, Malaysia’s KLCI and Indonesia’s Jakarta Composite Index (JCI) ended the month lower.
Indonesia recorded the region’s weakest performance, with the JCI plunging 7.9% for its sixth consecutive monthly decline amid a weakening rupiah, sustained foreign capital outflows and investor concerns following MSCI’s review of Indonesia’s market transparency.
CGS reported that foreign investors remained net sellers throughout June, withdrawing RM2.4 billion from Bursa Malaysia, although the pace of outflows eased from RM3.7 billion recorded in May.
Foreign funds were net sellers on 16 out of 19 trading days during the month as investor sentiment remained subdued following May’s MSCI rebalancing exercise and heightened by uncertainty ahead of upcoming elections.
The latest figures brought cumulative foreign net selling to RM3.2 billion year-to-date as of end-June.
Since 2024, cumulative foreign outflows have reached RM29.8 billion, contributing to foreign ownership in the Malaysian equity market falling to a new historical low of 18.3%.
Domestic institutional investors continued to provide support, extending their net buying streak to a third consecutive month with RM1.9 billion in net purchases, although this was lower than the RM3.1 billion recorded in May.
Retail investors also remained net buyers, contributing RM453 million, compared with RM597 million in the previous month.
Sector performance on Bursa Malaysia remained mixed, with only five of the 13 sectoral indices posting gains during June.
The Plantation Index emerged as the best-performing sector, rising 4.2%, supported by expectations of firmer crude palm oil prices amid concerns over supply disruptions linked to El Niño.
The Construction Index gained 1.7%, while the Consumer Products & Services Index advanced 1.1%.
On the downside, the Property Index recorded the steepest decline, falling 10.1%, followed by the Healthcare Index (-9.0%) and the Industrial Products & Services Index (-8.7%).
Among the 30 FBM KLCI constituents, 17 stocks ended the month higher.
Convenience store operator 99 Speedmart led the gainers with a 7.0% increase, followed by Petronas Dagangan, which gained 6.5%, and IOI Corporation, up 5.8%.
Meanwhile, Petronas Chemicals Group was the worst-performing KLCI constituent after tumbling 22.3%, followed by Press Metal Aluminium Holdings (-14.7%) and CelcomDigi (-12.5%).
CGS said the continued foreign selling, coupled with softer global sentiment, suggests investors remain cautious despite ongoing support from domestic institutions, with market direction likely to hinge on capital flows, corporate earnings and political developments in the months ahead.
