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...
China’s export sector is booming again, but beneath the surface, the economy is losing steam. Despite record overseas sales, data expected Monday is likely to show that China’s GDP grew just 4.7% in the third quarter, the weakest pace in a year. The slowdown sets the stage for a pivotal week as the Communist Party’s fourth plenum convenes to map out priorities for 2026–2030.
Exports Surge, Domestic Demand Falters
While exports delivered a record US$875 billion trade surplus, the rest of the economy is showing clear signs of fatigue:
Retail sales likely rose just 3% in September, the slowest this year.
Industrial output is expected to climb 5%, also a year-to-date low.
Fixed-asset investment has stagnated, despite a large government borrowing program.
Foreign direct investment is also slipping, down nearly 13% year-on-year, signaling a retreat in global confidence. Public infrastructure spending is rising, but not enough to offset the deep slump in housing and manufacturing investment.
Structural Challenges Take Center Stage
Bloomberg Economics notes that China now faces structural headwinds rather than short-term shocks. A long-running property downturn, entrenched deflation, and escalating trade restrictions from the United States are weighing on growth.
The IMF, which maintained its 2025 growth forecast at 4.8%, expects a further slowdown to 4.2% in 2026. It warned that China risks sliding into a debt-deflation cycle unless it rebalances toward domestic consumption and eases its heavy reliance on industrial policy.
Policy Watch: The Fourth Plenum
The upcoming plenum will be closely watched for signals on policy direction. Key areas investors will focus on include:
Fiscal measures to support households and small businesses.
Stabilization efforts for the property sector.
Policies that encourage consumption-led growth.
A credible pivot toward stronger domestic demand could reassure markets that Beijing is prioritizing long-term stability over short-term stimulus.
Global Macro Developments
The broader global picture adds to the complexity.
In the United States, the delayed September CPI report is due Friday, providing crucial insight ahead of the Fed’s October policy meeting.
Japan’s inflation is expected to remain above target, while manufacturing activity continues to soften.
Europe faces weak PMI readings and political strain in France following an S&P downgrade.
Emerging markets, including Türkiye and South Africa, continue to balance inflation control with growth support.
Investor Outlook
China’s export success offers temporary relief, but it cannot offset the drag from weak domestic demand. The key question for investors is whether Beijing will commit to deep structural reforms.
Cautious positioning remains advisable, with potential long-term opportunities emerging in areas aligned with policy goals—such as domestic consumption, green technology, and next-generation manufacturing.
Bottom line: China’s trade engine remains powerful, but without renewed domestic momentum, sustainable growth will be hard to achieve. Investors should prepare for volatility while keeping an eye on Beijing’s next policy moves.
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