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 Takeaway:
Stronger wages and a resilient labour market are not translating into higher consumer spending, raising concerns over Malaysia’s domestic demand-led growth. AmBank projects private consumption growth of ~5% in 2025, but notes that sentiment remains subdued amid global and domestic policy uncertainties.
Household Spending Trends
Income growth vs. spending restraint: Wages have risen post-pandemic, but loan applications, approvals, and disbursements at the household level have tapered off in recent months.
Weak sentiment: Tepid household spending reflects a low propensity to consume, driven by concerns over US policy shifts, global geopolitical risks, and domestic supply-side adjustments.
Implications for Growth
GDP contribution at risk: With private consumption making up over 60% of GDP, slower spending momentum could weigh on the broader economy.
Forecasts:
Official projections: GDP growth 4.0%–4.8% in 2025.
AmBank forecast: GDP growth 3.8%, underpinned by private consumption (~5%) and business investment.
Firdaos Rosli, AmBank’s chief economist, noted the absence of a “feel-good factor” to lift sentiment.
Policy and Fiscal Factors
Government cash aid: A recent RM100 per person payout (worth RM2b in aggregate) could provide short-term support to household spending.
RON95 subsidy rationalisation: Details expected end-September. The Finance Ministry is finalising a quota system for eligible individuals.
AmBank expects a gradual rollout rather than abrupt subsidy cuts, avoiding a repeat of last year’s diesel rationalisation shock.
Investor Takeaway
Consumer caution underscores potential downside risks to Malaysia’s growth story, even as the labour market and wages remain supportive. Policy execution — especially on fuel subsidies — will be a key swing factor for household sentiment into 2026. While headline GDP may hold up, the quality and sustainability of consumption growth remain in question.
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