KUALA LUMPUR, July 29 (Bernama) -- Bursa Malaysia rebounded to close higher on Wednesday on selective buying of defensive stocks after a volatile trading session. IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said consumer products and services stocks lifted the key index higher, overcoming lingering geopolitical concerns. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 3.08 points to 1,715.56 from yesterday’s close of 1,712.48. The benchmark index, which opened 1.91 points higher at 1,714.39, moved between 1,710.79 and 1,720.59 during the day’s trading. In the broader market, gainers outstripped decliners 550 to 476, while 612 counters were unchanged, 1,129 untraded, and 48 suspended. Turnover rose to 2.96 billion units valued at RM2.48 billion from 2.94 billion units valued at RM2.56 billion on Tuesday.
Malaysia’s technology sector continues to face earnings headwinds, with analysts warning that US tariff uncertainty and cost pressures could further dampen performance over the next six months.
What’s Happening?
According to Hong Leong Investment Bank (HLIB), tech stocks remain vulnerable even after a 21% decline in the Bursa Malaysia Technology Index so far this year — significantly underperforming the broader FBM KLCI, which is down about 7%.
The US recently announced a 25% blanket import tariff on all Malaysian goods — catching the Malaysian government off guard. President Donald Trump has, however, left the door open for negotiations until the Aug 1 deadline.
Key Concerns for Tech Firms
US tariff uncertainty is clouding visibility on long-term demand.
Rush orders currently supporting production may taper off once inventory levels normalize.
Companies face rising costs:
Higher electricity bills
Foreign exchange headwinds from a weaker ringgit
Sector-specific tariffs on semiconductors — which could be separate from the blanket import tariffs — are also a concern.
“Sentiment is likely to remain subdued until earnings expectations are reset and the outcome of US tariff policy becomes clearer,” – HLIB Research
Outlook from TA Securities
Despite forecasts of continued global semiconductor sales growth, TA Securities is adopting a cautious stance.
“If the US moves forward with sector-specific tariffs on semiconductors, it could severely impact end-market demand and corporate earnings,” – TA Securities
Summary
Malaysia’s tech sector, already under pressure from global uncertainties, now faces fresh risks from sudden US trade moves. With limited clarity on tariff outcomes and growing cost burdens, analysts expect muted investor sentiment and earnings volatility to persist in the near term.
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