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...
Producer Prices Continue to Fall
Malaysia’s Producer Price Index (PPI) dropped 4.2% year-on-year in June, marking the fourth straight month of decline and the steepest fall since June 2023. The decrease was broad-based, with significant deflation in:
Mining: -8.0% YoY (crude petroleum -6.7%, natural gas -12.0%)
Manufacturing: -4.3% YoY (notably coke and refined petroleum -17.7%, electronics -7.8%)
Agriculture: -0.3% YoY, the first drop since November 2023, driven by weaker animal production prices.
On a monthly basis, PPI slipped 0.7% in June, with declines in manufacturing, agriculture, and electricity prices, while mining prices rebounded sharply by 4.6%.
CPI-PPI Gap Widens
Consumer Price Index (CPI) growth slowed further to 1.1% YoY in June, the lowest since February 2021. This widened the gap between consumer inflation and producer price deflation, highlighting weak cost pass-through at the wholesale level despite ongoing price pressures in retail goods and services.
Inflation Expected to Climb in Second Half
MBSB Research forecasts inflation to trend higher in the second half of 2025, citing:
Rising cost pressures from global commodity trends.
Policy changes, including the expanded Sales and Service Tax (SST).
Stronger demand following the recent OPR hike and fiscal measures.
While the petrol price adjustment is expected to mainly impact non-citizens and high-income groups, MBSB notes that the effect on headline inflation could be softened by the reduction in the subsidised RON95 price.
Outlook
With PPI continuing to contract and CPI staying subdued, Malaysia faces a transitional period where deflation at the producer level may give way to higher consumer inflation in the coming months as policy changes and demand recovery take hold.
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