KUALA LUMPUR: Foreign investors returned to Malaysian equities in July, recording RM300.9mil in net inflows, with buying concentrated in financial services, transportation and logistics, and utilities.
MBSB Research’s latest Weekly Fund Flow Report showed that financial services stocks attracted the largest inflow during the month at RM1.11bil, followed by transportation and logistics at RM367.2mil and utilities at RM305.6mil.
Head of research at MBSB Research Imran Yassin Yusof said the distribution of the inflows offered a more useful indication of investor sentiment than the overall figure alone.
The return of foreign buying is a constructive signal, but the composition of the flows is more telling than the headline figure, he added.
“Inflows were concentrated in financial services, transportation and logistics, and utilities, while technology and industrial products and services continued to see sales.
“In our view, this reflects a more selective allocation of capital towards sectors offering clearer earnings visibility, stronger domestic relevance and more defensive characteristics,” he wrote in a research note yesterday. Even so, Yassin noted that one month of inflows did not establish a durable trend.
“Elevated producer prices, softer leading indicators and uncertainty over global interest rates could continue to shape investor appetite in the coming months,” he continued.
MBSB Research highlighted that the July inflows came against a mixed economic backdrop, with Malaysia’s producer price inflation accelerating to 9.2% year on year in June, its strongest annual increase since June 2022, driven largely by supply chain disruptions linked to the West Asia conflict.
At the same time, Malaysia’s Leading Index declined 0.5% month-on-month in May, with annual growth moderating to 0.8%, which pointed to a softer near-term economic outlook, according to the report.
It said that against this backdrop, the renewed interest in transportation and logistics and utilities provided a timely signal for industries connected to trade, mobility, energy and industrial development.
The sector classifications indicated where foreign investors were finding relative confidence within the Malaysian market, it added. — Bernama
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