Malaysia Weekly Market Pulse | Foreign Funds Reignite Bursa as Tariff Deadline Looms

Market Overview

Bursa Malaysia rebounded to 1,550.19, marking a +1.44% weekly gain despite global market jitters ahead of the U.S. tariff policy deadline on July 9. The return of foreign funds into local equities offered a rare tailwind, although retail investors remained net sellers for the second straight week.

• USD/MYR closed at 4.2222, marginally lower by 0.15%, reflecting cautious FX sentiment ahead of expected tariff announcements.

Key Highlights & Market Catalysts

1. Policy Moves Support Domestic Demand

Malaysia expanded the Sales and Service Tax (SST) to cover more goods/services (5–10%) while shielding low-income groups via exemptions. The revised electricity tariff structure further aids cost-of-living support and energy efficiency.

Investor takeaway: The SST reform is mildly inflationary but signals government commitment to revenue stability while cushioning vulnerable households—a net positive for utility providers and domestic consumption-related stocks.

2. Tariff Anxiety Weighs on Exporters

The U.S. 90-day tariff ceasefire nears expiry. Electronics, commodities, and logistics players are bracing for potential new duties. This has clouded short-term earnings visibility for Malaysian exporters.

Investor takeaway: Investors should monitor companies with U.S.-linked revenue, especially those in semiconductors and palm oil, which may need to reroute supply chains or diversify export destinations.

Foreign Equity Flow (Big Comeback)

Period	Foreign Flow	Local Institutions	Retail Investors
30 June – 4 July	+RM303 mil	+RM61 mil	–RM364 mil
23 – 26 June	+RM33 mil	+RM143 mil	–RM176 mil

• Foreign inflows surged 9x from the previous week, driven by utilities, industrial products, and transport stocks.

• Local funds continued net buying, but retail investors offloaded heavily, possibly taking profits or rotating away from volatile sectors.

Trade on Focus: Gamuda (5298.KL)

Gamuda revised down the Penang LRT contract cost to RM7.8–8.0 billion (from RM8.31 billion), enhancing investor confidence in project execution and future margin recovery.

• Why it matters: A leaner LRT project improves capital allocation and signals Gamuda’s strong grasp of cost management—boosting its position as a key infrastructure play.

• Stock price: Despite a recent 2.1% pullback, the longer-term uptrend remains intact, supported by consistent project wins and robust order book visibility.

Sector Performance Summary (Weekly)

Top Gainers	%	Top Losers	%
Technology	+4.04%	Construction	-0.73%
REITs	+1.18%	Energy	-0.49%
Production	+1.00%	Financials	+0.15%

• Tech stocks rebounded sharply as investors priced in demand resilience and potential rate easing later this year.

• Construction underperformed, weighed down by uncertainties around public infrastructure spending and rising material costs.

Outlook

The near-term outlook hinges on U.S. trade policy clarity, domestic earnings momentum, and regional fund flow trends. Foreign investor re-entry is promising, but retail sentiment remains fragile.

What to watch:

• July 9 tariff decision (U.S.)

• Q2 earnings announcements

• Continued developments in government-led infrastructure projects