KUALA LUMPUR, Jan 7 (Bernama) -- Bursa Malaysia’s benchmark index rebounded from earlier losses to close at its intraday high on Wednesday, gaining 0.27 per cent in late trading as buying interest returned to selected heavyweights. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) advanced 4.48 points to 1,676.83 from Tuesday’s close of 1,672.35. The benchmark index opened 0.88 of-a-point lower at 1,671.47 and subsequently hit a low of 1,665.94 during the mid-morning session before gaining momentum toward closing. On the broader market, losers led gainers by 565 to 512, while some 526 counters were unchanged, 1,046 untraded, and 10 suspended. Turnover improved to 2.73 billion units worth RM2.76 billion versus Tuesday’s 2.66 billion units worth RM2.76 billion. Dealers said that investors were cautious following geopolitical developments in Asia.
The global economy faces a turbulent road ahead in 2025, with risks stemming from geopolitics, trade wars, and structural challenges in major economies.
Key Challenges:
- Trade War Risks: A potential Donald Trump presidency could spark a global trade war through import tariffs of 10% to 20%, escalating to 60% for Chinese goods, risking fresh inflation and economic slowdown.
- Geopolitical Uncertainty: Conflicts in Ukraine and the Middle East add unpredictability to global energy costs and supply chains.
- Economic Disparities: While wealthy nations grapple with voter dissatisfaction over cost-of-living crises, poorer countries face their worst economic state in two decades, exacerbated by weaker trade and funding conditions.
- Debt and Spending Strains: Governments face stretched budgets due to climate action, military spending, and ageing populations, raising fears of a potential financial crisis if debt levels continue to climb unchecked.
- European Political Deadlocks: Political stagnation in Germany and France hinders efforts to address investment shortfalls and skills shortages in the eurozone.
- China’s Transition: Mounting pressure on China to shift from manufacturing dependency to boosting consumer spending poses significant challenges for the world's second-largest economy.
Outlook for 2025:
- Interest Rate Trajectory: Policymakers are banking on central banks completing their return to normal interest rate levels, but inflation and geopolitical factors could disrupt this progress.
- Currency Pressures: A stronger US dollar could divert investments away from emerging economies and increase the cost of dollar-denominated debt.
- Global Stability: The IMF warns of uncertain times, with energy costs, trade policies, and voter dissatisfaction being pivotal factors shaping economic performance.
Implications:
The year ahead demands cautious optimism, with policymakers and financial markets bracing for volatility while striving to maintain global economic stability.
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