KUALA LUMPUR, Sept 8 (Bernama) -- Bursa Malaysia closed almost flat on Tuesday as buying interest rotated away from index heavyweights towards smaller-cap construction stocks, with sentiment affected by geopolitical uncertainty, said an analyst. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 0.39 of a point to 1,714.40 from Monday’s close of 1,714.79. The benchmark index opened 1.65 points lower at 1,713.14 and moved between 1,710.44 and 1,714.50 throughout the trading session. The broader market was almost evenly balanced, with decliners leading gainers 548 to 546, while 598 counters were unchanged, 1,107 were untraded and 25 were suspended. Turnover expanded to 4.13 billion units valued at RM3.14 billion from 3.60 billion units valued at RM2.45 billion on Monday.
Bank Negara Malaysia (BNM) delivered a 25bps OPR cut to 2.75%, aligning with consensus and OCBC’s forecast. The move signals a dovish pivot, with the central bank emphasizing downside risks to growth and benign inflation, setting the stage for further monetary easing in 2025.
Rate Cuts Not Over — OCBC Projects Another 25bps Reduction
Next cut likely at either the Sept 4 or Nov 6 MPC meeting
Target OPR: 2.50% by end-2025
Motivation: Shield economy from external headwinds (tariffs, geopolitics), support domestic demand
Growth Outlook: Slowing Momentum
2025 GDP forecast: 3.9% YoY
1H25: Growth expected to ease to 3.6% YoY (vs. 4.3% in 1H24)
Driven by:
Tariff shocks (25% on key exports by Aug 1)
Softening external trade
Domestic demand holding for now, but vulnerable
Inflation: Contained Despite Subsidy Reform
2025 inflation tracking at 1.5%, even with RON95 rationalisation in Oct (+20–25% price hike)
Estimated total impact: +0.5pp → Headline inflation capped at 2.0%
Supports continued accommodative policy stance
Investor Implications:
Lower-for-longer interest rates expected — bullish for rate-sensitive sectors: banks, REITs, consumer
External demand risks underscore importance of domestic demand-focused equities
Currency implications: Further rate cuts may weigh on MYR sentiment; FX hedging recommended
Bottom Line:
BNM is prioritizing macro stability and domestic resilience in a weakening global trade environment. Expect another pro-growth cut, especially if inflation stays tame and tariff fallout bites deeper. Investors should position for yield compression and defensive rotation in Malaysia’s equity landscape.
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