KUALA LUMPUR, March 28 (Bernama) -- Bursa Malaysia closed lower today on profit-taking after a strong three-day rally, and investor sentiment was further shaken in the late afternoon session following news of an earthquake in Myanmar with tremors felt in neighbouring Thailand, said Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) slid 1.44 per cent or 22.08 points to 1,513.65, its intraday low, from Thursday’s close of 1,535.73. The benchmark index opened 4.16 points lower at 1,531.57 and hit an intraday high of 1,533.52 during the midday session. On the broader market, decliners outpaced gainers 563 to 395, while 408 counters were unchanged, 1,106 untraded, and 133 suspended. Turnover slipped to 2.25 billion units valued at RM2.13 billion from 2.52 billion units worth RM2.41 billion on Thursday.
Key Takeaways:
Potential Risks from U.S. Tariffs: Analysts have raised concerns over the upcoming "Liberation Day" tariffs set to be announced on April 2 by U.S. President Donald Trump. These tariffs, which are expected to impact several countries, could slow global trade and negatively affect Malaysia’s export performance. The prospect of more restrictive trade measures and retaliatory actions, along with rising geopolitical tensions, pose key risks to the Malaysian economy in 2025.
BNM’s Optimistic Outlook: Bank Negara Malaysia (BNM) has projected Malaysia’s economic growth to be between 4.5% and 5.5% in 2025, with inflation expected to range between 2% and 3.5%. However, these projections do not account for the new tariffs, raising concerns about how these measures might impact growth, especially as Malaysia is still recovering from global trade disruptions.
Trade Diversification Provides Buffer: Despite these risks, analysts noted Malaysia's increasing trade diversification and its positioning in the global tech value chain could provide some insulation from the impact of the new tariffs. Public Investment Bank emphasized that the global trade environment remains fragile, and further disruptions could dampen demand from key trading partners.
External Risks Could Weigh on Growth: If the new tariffs and geopolitical tensions escalate, Malaysia’s growth may lean towards the lower end of the forecast range. Analysts highlighted that ongoing concerns around commodity production, weather disruptions, and cautious investment decisions could also hold back growth.
Optimism in Banking Sector: Amidst the external challenges, analysts remain optimistic about Malaysia’s banking sector. The sector is expected to act as a "safe haven" due to its resilience, especially with banks proving their ability to weather extreme stress scenarios. Analysts also highlight the strong dividend yield and attractive valuations in the sector. Stocks like Malayan Banking Bhd and Public Bank Bhd are among the top picks.
Interest Rate Outlook: While concerns over external risks persist, UOB Global Research anticipates that Malaysia’s overnight policy rate (OPR) will remain stable at 3% for now, with any potential rate cut unlikely to significantly impact the banking sector in the short term.
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