KUALA LUMPUR, July 29 (Bernama) -- Bursa Malaysia rebounded to close higher on Wednesday on selective buying of defensive stocks after a volatile trading session. IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said consumer products and services stocks lifted the key index higher, overcoming lingering geopolitical concerns. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 3.08 points to 1,715.56 from yesterday’s close of 1,712.48. The benchmark index, which opened 1.91 points higher at 1,714.39, moved between 1,710.79 and 1,720.59 during the day’s trading. In the broader market, gainers outstripped decliners 550 to 476, while 612 counters were unchanged, 1,129 untraded, and 48 suspended. Turnover rose to 2.96 billion units valued at RM2.48 billion from 2.94 billion units valued at RM2.56 billion on Tuesday.
Malaysia’s technology and construction sectors came under selling pressure on Monday morning following reports of a draft US policy that could restrict the export of AI chips to Malaysia and Thailand. The proposed regulation, not yet finalised, aims to curb potential re-exports of advanced chips to China via third-party countries, intensifying concerns around global supply chain disruption.
Key Market Reactions:
Inari Amertron Bhd (INARI) fell 5.8% to RM1.96, reflecting investor concerns over its role in the global semiconductor value chain.
Gamuda Bhd (GAMUDA) declined 5.2% to RM4.83, with potential implications for its data centre-related construction contracts.
The FBM KLCI dropped nearly 1%, down 15 points, signalling broader market caution.
Background & Policy Risk:
According to Bloomberg, the US Commerce Department is working on a draft rule to block AI chip shipments to Malaysia and Thailand as part of efforts to tighten control on advanced chip access. The move comes after Washington barred sales of AI chips to China last year. These new restrictions are seen as an attempt to prevent indirect access through nearby Southeast Asian countries.
While the rule is not yet confirmed, the report was enough to raise risk premiums on Malaysia’s chip assembly ecosystem and the supporting infrastructure sector.
Implications for Tech Sector:
Malaysia is a global hub for semiconductor back-end services. Companies like INARI, MPI, and Unisem could be exposed if global chipmakers reduce outsourcing to avoid regulatory scrutiny. Although these companies are not directly involved in chip design, the uncertainty around US compliance requirements may weigh on client orders and capex flows.
Construction Sector Watch:
The construction sector—particularly firms involved in data centre projects—may face investment delays if tech clients reassess regional plans. Gamuda’s involvement in large-scale tech infrastructure has made it a proxy play on digitalisation, but today's selloff shows that global regulatory shifts are a key valuation risk.
Investor Outlook:
The next key date is July 9, marking the end of the US 90-day reciprocal tariff negotiation window. With broader trade policy still evolving, investors are likely to adopt a wait-and-see stance.
Short-Term View:
Risk sentiment to remain fragile across tech and construction names.
Any confirmation of the US rule may trigger further re-rating across the tech value chain.
Rebound potential hinges on policy clarity and client reassurances from US-based chipmakers.
Conclusion:
While fundamentals remain intact for select companies, policy risk has become a key factor for sector revaluation. Investors are advised to monitor developments closely and re-assess exposure to sectors sensitive to external regulatory shifts.
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