Malaysian stocks attracted US$635 million from abroad this year, while the rest of emerging Asia ex-China saw US$14.2 billion withdrawn, according to data compiled by Bloomberg. India was the only other market with net buying. Overseas money could flow out as quickly as it flowed in, analysts said.

Foreigners are now “a potential source of downside risk for Malaysia”, Credit Suisse strategists Sakthi Siva and Kin Nang Chik wrote in a note today, adding that the country’s stocks are “expensive” after receiving the highest foreign inflows in 2018 as a percentage of market capitalisation in Asia Pacific.

Tushar Mohata, an analyst at Nomura Malaysia, forecast that volatility will increase amid heightened political risk and the possibility that foreign inflows will reverse course. He made his model portfolio more defensive and put his target of 1,920 for the KLCI Index under review after the historic election win.

The popularity of Malaysia’s ringgit sovereign bonds with foreigners may also exacerbate declines when the country’s onshore markets reopen on Monday.

Overseas investors owned around 29% of the notes at the end of 2017, second only to Indonesia among six markets surveyed by the Asian Development Bank.

Increased fiscal risks and “high foreign positioning” is likely to weigh on Malaysian debt, said Vivek Rajpal, a rates strategist at Nomura Holdings Inc in Singapore.