Foreign investment fuels Malaysia's stock market growth

Foreign investor participation in Malaysia's stock market increased in 2024, accounting for 36.2% of total trading activity, up from 29.51% in 2023, according to the "Capital Market Stability Assessment 2024" report released by the Securities Commission Malaysia (SC) on Thursday.

The SC said the increase coincided with improved liquidity conditions in the local bourse compared to the preceding year.

"This improvement was reflected in the increased overall average daily trading value and volume, which averaged at RM3.44 billion ($778,000) and 4.29 billion units respectively, during the year,” it said.

However, it noted that foreign investors were net sellers in the domestic equity market, recording a cumulative net outflow of RM4.16 billion as of the end of 2024.

Over the same period, the average daily trading value by foreign investors stood at RM1.14 billion, and the average daily trading volume (ADTV) was 739.43 million units.

The SC said foreign holdings in Malaysian equities increased to 19.69% as at December 31, 2024, from 19.54% in 2023, where 32.08% (MY131.22 billion) of which consisted of holdings by non-strategic investors.

At the same time, the trading participation of local institutional investors was slightly lower at 43.16% in 2024 from 43.32 in 2023.

The average daily trading value by local institutions in the domestic market stood at RM 1.38 billion, with an ADTV of 1.80 billion units.

"Conversely, local retail investors recorded a lower participation rate of 20.64% in 2024 compared to 27.17% in 2023.

"The average daily trading value by local retail investors in the domestic market was RM640.22 million, with an ADTV of 1.47 billion units,” the SC said.