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.
Investment Analysis: Tariff Warning Could Accelerate Economic Bloc Divergence
President Donald Trump’s latest post-election move to penalize nations aligning with BRICS policies — by proposing a 10% blanket tariff — marks a significant escalation in global trade and currency realignment tensions.
On Sunday night, Trump warned that any country supporting the "anti-American policies" of BRICS would face an additional 10% tariff. While no specific timeline or policy parameters were outlined, the announcement coincides with the ongoing BRICS summit where leaders from China, India, Brazil, South Africa, and Russia discussed a cross-border payment system, inching toward de-dollarization.
This raises the stakes for countries caught between US trade access and BRICS alignment, particularly emerging markets in Southeast Asia, Africa, and Latin America that have benefitted from both US trade relations and Chinese Belt-and-Road investments.
Why It Matters for Investors
1. New Phase of Economic Bloc Formation
Trump’s rhetoric reinforces the divide between Western-aligned economies and the BRICS+ group. If followed through, the tariff could accelerate capital realignment and push neutral countries to choose sides, a dynamic not seen since the Cold War era.
Impacted Sectors:
Export-oriented EM economies with high BRICS trade links
US multinationals with supply chains in non-aligned regions
Commodities and energy, which are increasingly being traded in local currencies
2. De-Dollarization Momentum Could Grow
Though the BRICS payment system remains in its early stages, US threats may incentivize broader use of local currencies and alternative settlements. Trump had earlier hinted at 100% tariffs if BRICS ditch the US dollar in bilateral trade.
Investment Implication:
Keep a watch on FX reserves diversification by central banks
Rise in gold and alternative reserve assets as hedges
Volatility in USD vs EM currencies, especially CNY, INR, and BRL
3. Tariff Volatility = Market Repricing Risk
Even without formal implementation, Trump's policy uncertainty has historically triggered risk-off reactions in equity and currency markets.
Expect traders to reposition portfolios ahead of the July 9 tariff expiration, potentially selling off exposed EM and rotating into US domestic plays or safe-haven assets.
Possible Beneficiaries:
US infrastructure, defense, and domestic manufacturing
North American energy producers (if global supply chains realign)
Precious metals and defensive sectors like utilities
Looking Ahead
While the lack of clarity in Trump's statement makes the timeline and scope uncertain, the message is clear: A more aggressive and protectionist US trade stance is back on the table.
Investors should prepare for:
Tactical volatility across Asia-Pacific and Latin American markets
Re-evaluation of global trade exposure in equity portfolios
Rise in currency hedging costs and geopolitical risk premiums
Strategic Focus: Monitor cross-border capital flows and trade patterns closely — this geopolitical moment may be shaping the next era of global asset allocation.
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