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...
Key Takeaways
Rising wages and a resilient labour market have not translated into stronger consumer spending.
Household loan applications, approvals and disbursements have slowed in recent months, signalling caution.
AmBank projects private consumption growth of 5% in 2025, supporting GDP growth of 3.8%, below official forecast of 4.0–4.8%.
Consumer sentiment remains subdued amid global policy uncertainty and domestic policy changes, limiting the “feel-good factor.”
Short-term support expected from the government’s RM100 cash aid, injecting ~RM2 billion into the economy.
The upcoming RON95 petrol subsidy rationalisation poses further uncertainty, though AmBank expects a gradual rollout rather than abrupt changes.
Analysis
Malaysia’s post-pandemic wage recovery and strong labour market have not spurred proportional increases in consumer spending. AmBank’s chief economist Firdaos Rosli highlighted weakening household borrowing trends as evidence of rising caution among consumers. This hesitancy could weigh on growth, given that private consumption accounts for over 60% of GDP.
AmBank’s 2025 forecast of 3.8% GDP growth is more conservative than the government’s projection. Firdaos stressed that consumption growth could have been stronger had consumer sentiment improved, but uncertainty from U.S. policy shifts, geopolitical risks, and domestic supply-side reforms continues to dampen confidence.
While temporary fiscal support via cash aid may provide a near-term boost, the structural test will come from fuel subsidy reforms. The Finance Ministry is finalising quota-based subsidy rationalisation for RON95 petrol. Firdaos expects a carefully phased approach, avoiding the abrupt impact seen during diesel rationalisation in 2024.
Investor Implication
The outlook suggests a softer domestic demand profile than headline GDP forecasts imply. Defensive sectors with stable cash flows may outperform in this environment, while discretionary consumer sectors could face headwinds until sentiment improves. Policy clarity on RON95 subsidies will be a key determinant for household spending in the coming quarters.
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