KUALA LUMPUR, March 10 (Bernama) -- Bursa Malaysia rebounded to end higher today with the benchmark FBM KLCI reclaiming the 1,700 psychological level, supported by improved global sentiment after US President Donald Trump signalled a potential de-escalation of the Iran conflict, alongside Malaysia’s stronger Industrial Production Index (IPI) data. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) increased 27.51 points, or 1.64 per cent, to 1,701.68 from yesterday’s close of 1,674.17. The benchmark index opened 10.68 points higher at 1,684.85, its lowest point today, and hit a high of 1,703.61 in the late afternoon session. Market breadth was positive, with gainers thumping losers 929 to 382. A total of 361 counters were unchanged, 982 untraded and 19 suspended. Turnover declined to 3.60 billion units worth RM3.75 billion from yesterday’s 5.52 billion units worth RM5.87 billion.
Retail Volumes Surprise on the Upside
New Zealand’s retail sector showed unexpected strength in 2Q25, suggesting that recent interest-rate cuts are beginning to filter through to household spending.
Retail sales volumes (inflation-adjusted): +0.5% QoQ (vs. consensus: –0.3%).
Marks the third straight quarterly gain, defying expectations of weak consumer demand.
The data contrasts with the Reserve Bank of New Zealand’s (RBNZ) forecast of a 0.3% GDP contraction for Q2, raising the possibility that household consumption could provide a stabilizing force for the broader economy.
Sector Breakdown
Electrical goods: +4.6% (strongest gain, reflecting improved discretionary demand).
Furniture, floor coverings, recreational goods: Also higher.
Accommodation: –2.1%.
Food & beverage: Fell for the second consecutive quarter.
Hospitality: Spending remains flat, highlighting continued weakness in services.
Policy Backdrop
RBNZ rate cuts: OCR has been reduced by 250bps since Aug 2024, now at 3%, with guidance toward 2.5%.
Transmission effect: More households expected to refinance mortgages at lower rates in the next six months, unlocking further disposable income.
Offsetting risk: A softening labor market may weigh on consumer confidence and limit spending momentum.
Analyst Commentary
Westpac (Satish Ranchhod): Retail conditions remain challenging, but signs of recovery are emerging, particularly in discretionary categories. However, spending remains uneven across sectors.
Outlook: “The full impact of lower rates has yet to be felt, suggesting spending momentum could build further into 2H25.”
Investment Implications
Equities:
Retailers (electronics, household goods) likely to benefit from rising discretionary demand.
Hospitality and F&B remain laggards, highlighting sector divergence.
Fixed Income: Stronger retail activity may temper expectations for ultra-aggressive RBNZ easing beyond 2.5%.
NZD Outlook: Surprise retail resilience could offer near-term support to the currency, though capped by ongoing GDP weakness and labor market risks.
Real Estate: Lower mortgage rates and rising spending may stabilize housing-related retail categories, offering a lift to property-linked sectors.
Bottom Line
New Zealand’s retail rebound provides an early sign that aggressive monetary easing is starting to gain traction. While growth remains uneven — with hospitality and essential spending still weak — discretionary categories are strengthening. For investors, the data points to a gradual consumer-led recovery, supporting selective opportunities in retail equities and signaling that the RBNZ’s easing cycle may not extend as far as markets anticipate.
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