Expect significant new tariffs on Chinese imports and moderate levies on goods from other nations , as President-elect Donald Trump rolls out his protectionist agenda. However, with his preference for chaotic policymaking and sudden shifts , there’s uncertainty on how soon these import taxes will actually hit. Dubbed “ Tariff Man ,” Trump aims to use tariffs both strategically and tactically . He’s mentioned taxing all Chinese goods up to 60% and potentially setting 10%-20% tariffs on imports globally , but details on these plans remain vague . Key players within Trump’s team are divided: Robert Lighthizer , a staunch tariff advocate, sees permanent duties as crucial to balance US trade , while others, like billionaires John Paulson and Scott Bessent , view tariffs as temporary leverage. Trump’s previous administration had mixed feelings, especially on national security-related trade limits , which he sometimes dismissed, favoring an “open for business” approach. High-profile busin
Global investors are increasingly focusing on Indonesia and Malaysia, betting that these markets will benefit more than other developing nations as the Federal Reserve looks set to ease monetary policy. These two Southeast Asian markets are becoming attractive due to sound fiscal policies and a focus on new technology sectors, such as electric vehicles and data centers, which are drawing in more funds.
Key Highlights:
Increased Inflows to Indonesia and Malaysia:
- Indonesia, Malaysia, and the Philippines were the only countries in Asia to see net overseas inflows into stocks in August.
- Foreign investors bought $1.8 billion of Indonesian shares, the highest since April 2022, helping the Jakarta Stock Exchange Composite Index reach record highs.
- Foreign buying of Malaysian stocks reached $491 million by August 29, the highest since March 2022.
Attractive Factors:
- Indonesia: The potential easing of monetary policy, fiscal discipline, and its role in the global electric vehicle and battery supply chains.
- Malaysia: Strong economic growth, driven by investments in tech and AI-driven data centers, and its position as a chip-testing hub attracting significant infrastructure spending from companies like Microsoft, Nvidia, and Alphabet.
Currency Performance:
- The Malaysian ringgit and Indonesian rupiah are among the top-performing emerging-market currencies against the dollar this month, driven by expectations of the Fed cutting its key policy rate soon. The weakening of the US dollar is expected to continue supporting these currencies.
Risks and Challenges:
- Investors are cautious about Indonesia's leadership transition and policy continuity under President-elect Prabowo Subianto.
- In Malaysia, a rapid reversal of the AI trade could lead to market volatility, while geopolitical tensions and US elections could weigh on sentiment.
Outlook and Optimism:
Nomura Holdings upgraded equities in both Indonesia and Malaysia due to solid macro fundamentals, while HSBC noted that Indonesian stocks have gained more prominence in Asian funds' portfolios. Southeast Asia is viewed as undervalued and under-researched, presenting a potential opportunity for global investors.
Overall, the positive sentiment and anticipation of further US dollar weakness provide a favorable environment for continued investment inflows into Indonesia and Malaysia.
Comments
Post a Comment