Local institutions are now driving fund flows in Malaysia

Recent trends indicate that local institutions are now driving fund flows in Malaysia, replacing foreign influence. Domestic fund flows are expected to increase and support the market as foreign markets, like Wall Street, appear overvalued.

Foreign shareholding has improved from a low of 11.35% in 2001 to potentially exceeding 20% in 2024, reflecting a stable political climate and favorable business environment. Malaysia’s strong performance within the SEA region suggests foreign shareholding could reach 25%.

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Local institutions gaining

“Of late it is rather apparent that the local institutions are taking over the reign. We believe domestic fund flows to intensify overtime and take the lead to prop-up the market.

“This is more evident as foreign markets especially on Wall Street are currently deemed overvalued and may
not justify the risk reward ratio,” says Rakuten Trade.

“Foreign shareholding has improved consistently since 2001 when it touched the lowest @11.35% amid the Covid and political transitioning,” analysts add during the Q3 Market Outlook Media Briefing.

More from Rakuten

▪ Fast forward to 2024, we noticed a marked improvement in foreign shareholding amid a more stable political climate and business environment.
▪ Therefore, we are confident that foreign shareholding may surpass the 20% threshold and test the 25% level especially now that Malaysia is shining rather brightly within the SEA region.