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.
The term “内卷” (neijuan), or “involution,” refers to relentless competition that leads to stagnation instead of progress—think firms slashing prices to survive rather than innovate or grow.
This phenomenon has become especially toxic in China’s high-stakes sectors like:
Solar energy
New energy vehicles (NEVs)
Steel, cement, aluminum
Chemicals
Even downstream consumer sectors like food and healthcare
Stock Market Response: A-Shares Take the Lead
Investors are starting to price in change. July saw the CSI 300 Index (onshore A-shares) outperform the Hang Seng China Enterprises Index, marking a turnaround in sentiment.
Notable winners:
Liuzhou Iron & Steel (+50%)
Angang Steel (+16%)
Xinjiang Daqo New Energy & Tongwei (+19%+)
Cement, glass, and chemical stocks also rallied
Morgan Stanley even shifted its preference toward onshore equities, citing improved confidence.
Will This Be 2015 All Over Again?
Veteran China watchers are drawing parallels with the 2015–2018 supply-side reforms, when Beijing reduced coal and steel capacity—leading to higher prices and better margins.
But this time, there are key differences:
Overcapacity is more widespread, affecting even tech and consumer sectors
Private firms, not state-owned enterprises (SOEs), dominate many of the affected industries—making consolidation more complex
There’s no concrete policy plan yet, only verbal signals
“This isn’t going to be an overnight fix,” warns Bank of Singapore’s Louisa Fok. “But it’s positive that Beijing is acknowledging the problem.”
Investment Outlook: Opportunity in Chaos?
If followed by action, this campaign could drive sector consolidation, improve pricing power, and eventually boost valuations across:
EV and battery makers
Solar and renewables
Steel, aluminum, cement
Select industrials and materials
JPMorgan’s Wendy Liu sees the potential for stronger margins and valuation rerating if reform unfolds successfully.
Key Takeaway
Beijing's anti-involution campaign is not just a new buzzword—it’s a potential pivot point in policy tone. For investors, the shift opens short-term trading opportunities and longer-term restructuring plays in sectors plagued by oversupply.
Still, without tangible follow-through, the market’s optimism could fade. Watch for upcoming NPC meetings, regulatory guidance, and industrial policy announcements to validate the trend.
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