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.
After a strong start to 2025, Malaysia's economic engine is losing steam — and fast.
The early-year surge? Fueled by frontloaded exports to the US. But with new tariffs kicking in on August 1, the momentum is fading. Now, economists are sounding the alarm: 2H25 could be a lot bumpier than expected.
Export Rush = Temporary Boost
OCBC’s Lavanya Venkateswaran revealed that Malaysia frontloaded a whopping US$2.5B/month in exports between Oct 2024 and May 2025 — mainly electronics and electrical goods headed to the US.
Bank Muamalat’s Dr. Afzanizam added that exports to the US surged 33% in the first five months. That pushed 1H25 GDP growth to an estimated 4.5%, but the boost was always meant to beat the tariff clock.
💬 “This growth isn’t sustainable — it’s just timing,” said economist Geoffrey Williams.
What’s Coming in 2H25?
With frontloading done, the export wave is crashing. OCBC slashed its 2025 GDP forecast from 4.3% to 3.9%, expecting just 3.6% growth in 2H25.
And the risks are real:
43.6% of Malaysia’s exports to the US are exposed to tariffs (OCBC)
SST hikes and fuel subsidy cuts could hit consumer spending
Economists are even warning of a possible trade deficit
💬 “The hit to Malaysia may be worse than regional peers,” Lavanya said.
Policy Response: Rate Cut = Red Flag?
Bank Negara Malaysia just cut the OPR on August 9, a move seen by some as a warning sign.
💬 “It won’t save the day — but it shows BNM is worried,” said Williams.
Others like Afzanizam believe targeted support like cash transfers and fiscal spending could help cushion the blow — if done right.
Key Takeaway for Investors:
Malaysia’s outlook has shifted — from growth to grind. The 1H25 gains were frontloaded, not fundamental. With tariffs, tax changes, and subsidy reforms piling on, expect volatility and slower growth ahead.
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