Foreign investors turned net sellers of Malaysian equities in August 2026, recording RM2 billion in net outflows after briefly returning as net buyers in the previous month, according to CIMB Securities.
The reversal came after foreign investors registered net purchases of RM267 million in July, bringing cumulative foreign net selling for the first eight months of 2026 (8M26) to RM4.83 billion.
CIMB Securities said foreign shareholding by market capitalisation consequently declined by 0.3 percentage points month-on-month to 18.1% in August.
Foreign ownership was also lower on a year-on-year basis, declining from 18.8% in August 2025 to 18.1% in August 2026, reflecting the continued reduction in foreign participation in the Malaysian equity market.
In contrast, local institutional investors returned strongly to the market in August, emerging as net buyers of RM1.5 billion.
This marked a reversal from their RM406 million net selling position in July.
The August buying lifted local institutional investors’ cumulative net purchases for 8M26 to RM4.02 billion, indicating that domestic institutions continued to provide an important counterbalance to foreign selling pressure.
Local retail investors, meanwhile, remained net buyers for a fourth consecutive month, with purchases accelerating substantially during August.
Retail investors recorded net purchases of RM375 million, compared with just RM19 million in July.
The stronger buying reduced their cumulative net selling position for the first eight months of the year to only RM6 million, bringing retail flows close to neutral for 2026.
Proprietary investors also remained net buyers for a second straight month, although their buying moderated.
Net purchases by proprietary investors fell 50% month-on-month to RM61 million in August. Nevertheless, their cumulative net buying position increased to RM814 million for 8M26.
Overall, the latest fund-flow data showed domestic investors absorbing much of the selling pressure from overseas investors during August, led particularly by local institutions.
The return of foreign selling also highlights continued volatility in overseas portfolio flows into Bursa Malaysia, after the RM267 million inflow in July had temporarily interrupted the broader net selling trend seen during 2026.
With cumulative foreign outflows approaching RM5 billion for the year to August, investor attention will remain on global interest-rate expectations, geopolitical developments and Malaysia’s domestic economic and corporate earnings outlook for indications of whether foreign funds could return more sustainably to the local equity market.
