Bursa Malaysia posts best monthly performance of the year
The FBM KLCI surged 3.66 per cent to 1,725 points in July 2026 on stronger domestic fundamentals and the return of foreign net buying.
PETALING JAYA – Bursa Malaysia recorded its best monthly performance of the year as the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) surged 3.66 per cent to 1,725 points in July 2026, reversing the 1.13 per cent decline registered in June.
CIMB Securities said the positive momentum was driven by strengthening domestic economic fundamentals, the return of foreign investors as net buyers, and an encouraging start to the second-quarter corporate results season.
"These developments managed to overcome several external challenges that continue to weigh on global markets.
"Investor sentiment was also reinforced by Malaysia's advance second-quarter 2026 Gross Domestic Product (GDP) growth of 5.8 per cent year-on-year, exceeding market expectations," it said in a research note.
Easing inflation and Bank Negara Malaysia's (BNM) decision to keep the Overnight Policy Rate (OPR) at 2.75 per cent also lifted confidence in the country's economic outlook.
External headwinds
Globally, markets continued to face uncertainties including the reimposition of United States Section 301 tariffs, investigations into industrial overcapacity, geopolitical tensions in West Asia that briefly pushed Brent crude above US$100 a barrel (RM408.80), and a technology sector sell-off amid concerns over the sustainability of artificial intelligence (AI)-related spending.
The research firm said Malaysia remains a preferred investor destination given resilient domestic growth, attractive valuations and increasingly clear government policy direction.
Of 19 companies that have announced results, 21 per cent beat expectations while 26 per cent came in below projections, with the rest broadly in line with market forecasts.
Fund flows
Foreign investors returned as net buyers in July with net inflows of RM267 million, after RM6.1 billion in outflows across May and June. Buying was concentrated in financial services, transport and utilities.
Local institutions turned net sellers with RM406 million in outflows after two straight months of net buying, while local retail investors stayed net buyers for a third consecutive month, though purchases fell to RM19 million from RM453 million in June. Proprietary traders posted RM120 million in inflows.
The FBM KLCI was the third best-performing index among MIST markets in July with a 3.7 per cent gain, trailing Indonesia (10.5 per cent) and Singapore (8.9 per cent) but ahead of Thailand, which fell 7.9 per cent.
Plantation, industrial and financial counters led gains, while utilities, property and REITs lagged on profit-taking and interest rate concerns. Petronas Chemicals was the top component stock with an 18 per cent gain, followed by CelcomDigi (12 per cent) and SD Guthrie (10 per cent). Axiata, YTL Corporation and IOI Properties were among the biggest decliners.
In August, investor attention is expected to centre on the peak of the second-quarter results season, the special parliamentary sitting on Aug 11, the quarterly MSCI Index review, the final second-quarter GDP announcement, consumer inflation data and external trade statistics.
This article was produced with the assistance of artificial intelligence (AI), in accordance with our editorial policy.