KUALA LUMPUR, Dec 16 (Bernama) -- Bursa Malaysia extended its positive performance, closing higher for a fourth consecutive session, supported by improving local market sentiment underpinned by a firm domestic macroeconomic backdrop. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 4.59 points, or 0.28 per cent, to 1,648.31, from Monday’s close of 1,643.72. The index had opened 0.95 of a point lower at 1,642.77, and moved between 1,636.50 and 1,648.71 throughout the trading session However, on the broader market, decliners beat gainers 699 versus 408. A further 520 counters were unchanged, 1,149 untraded and 12 suspended. Turnover rose to 2.59 billion units worth RM2.27 billion from 2.50 billion units worth RM2.16 billion on Monday.
Key Takeaway
Bank Negara Malaysia (BNM) is expected to keep its overnight policy rate (OPR) at 2.75% today, pausing after July’s surprise cut as policymakers gauge the impact of easing amid tariff risks and subdued inflation.
Policy Expectations
Consensus: 22 of 24 economists expect no change at 2.75%.
Minority View: 2 economists see another 25bps cut.
Context: BNM delivered its first rate cut in five years in July and injected liquidity into banks to support lending.
Growth Outlook
Forecasts: GDP growth expected at 4%–4.8% in 2025 (BNM).
CIMB Analysts: Lower-than-feared U.S. export levy (19%) keeps expansion within forecast range.
Risks:
Slowing exports (BNM warning).
Potential U.S. tariffs on semiconductors.
HSBC View: Growth above 4% in current external environment would be “decent.” Base forecast: 4.2% for 2025.
Inflation Outlook
BNM Forecast: Trimmed to 1.5%–2.3% (from 2%–3.5%).
Drivers to Watch:
Higher minimum wage (RM1,700 since August).
Possible petrol subsidy cuts.
New water tariffs.
Current Status: Price pressures remain contained.
Ringgit Performance
YTD (2025): +5.8% vs USD (through Wednesday).
Outlook: Expected to appreciate further as U.S.–Malaysia interest rate differentials narrow with Fed cuts ahead.
MBSB Research: Positive fundamentals support MYR, though risks remain from delayed U.S. easing and global uncertainty.
Market Context
Regional Divergence: Malaysia contrasts peers (Philippines, Thailand, Indonesia), which are still easing to counter growth risks.
Policy Stance: Cautious, with focus on monitoring July measures before further moves.
Investor Watch
Rates/Bonds: Stable OPR supports short-term bond yields; further easing unlikely near term unless export slowdown worsens.
FX: Ringgit strength backed by fundamentals and narrowing U.S. differential, though volatility possible with tariff headlines.
Equities:
Banks and domestic demand-driven sectors favored under steady rate environment.
Exporters (especially semiconductors) remain vulnerable to U.S. tariff risks.
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