KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
What’s Happening?
Starting July 1, Malaysia will broaden its Sales and Service Tax (SST) to include over 3,000 new categories of goods and several new service sectors. This move aims to shore up national revenue without resorting to the GST system, but investors should be paying close attention.
Key Highlights
Affected goods include steel, industrial machinery, and tech components, now taxed at 5%-10%.
Services like rentals, leasing, and business support face an 8% tax.
Even B2B exemptions only partly reduce the cascading tax effect, potentially pushing up end-user costs.
Why It Matters to Investors
Unlike GST, SST doesn’t offer credits for prior-stage taxes, so costs build up along the supply chain. This affects:
Margins for manufacturers and exporters
Price competitiveness of Malaysian goods
Capital-intensive sectors like construction, electronics, and logistics
Industry Spotlight: Steel Under Pressure
The Malaysian Iron and Steel Industry Federation (Misif) warns of rising input costs, especially on scrap and coking coal, now taxed. With steel utilisation already low (39%), this tax bump could push producers to raise prices or absorb losses.
Investor Angle: What to Watch For
Listed manufacturers and exporters could see short-term margin pressure.
Construction and infrastructure plays may experience rising costs.
Southeast Asia-based supply chains (including tech hardware) could see downstream effects.
If you're exposed to sectors reliant on Malaysian components or operations, review cost assumptions in earnings forecasts for 2H2025.
MoneyMaster Take — Key Insights:
The SST expansion is a stealth cost burden that could impact sector margins.
B2B exemptions help, but aren’t enough to fully offset cascading effects.
Investors should monitor updates on further exemptions or reliefs.
What We’re Watching:
Government stance on potential further exemptions.
Earnings reports from Malaysian manufacturing and industrial names.
Export competitiveness in light of overlapping US-China trade friction.
Our Move:
This is not a sell signal, but a margin watch alert. Investors should rebalance if overexposed to tax-sensitive sectors and seek companies with strong pricing power or cost-passing ability.
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