KUALA LUMPUR, Jan 23 (Bernama) -- Bursa Malaysia’s benchmark index recouped earlier losses to settle higher, maintaining a more than six-year high, buoyed by continued buying interest in technology stocks, while the strengthening of the ringgit against the US dollar further lifted investor sentiment. At 2.27 pm today, the local currency strengthened to 3.9992 versus the greenback, its strongest level in more than seven years. It was last seen at this level on June 18, 2018, at 3.9960/9990. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 2.85 points or 0.17 per cent to 1,719.99 from yesterday’s close of 1,717.14. The index surpassed its previous peak of 1,719.00 recorded on Feb 26, 2019. The barometer index opened 1.30 points lower at 1,715.84 and moved between an intraday low of 1,711.89 in early trade and a high of 1,723.41 in late afternoon before slipping slightly toward the close. However, market breadth was negative with decl...
Malaysia closed out 2025 with a strong trade surprise and firmer inflation, riding a late-year export wave even as economists brace for a moderation in growth heading into 2026, according to OCBC Group Research.
December Trade Beats by a Wide Margin
Malaysia’s December trade data far exceeded market expectations, driven by a sharp acceleration in exports.
Export growth jumped to 10.4% YoY in December, up from 7% in November and well above the 2.5% consensus forecast. Imports remained solid at 12.0% YoY, though slower than November’s 15.8%.
As a result, Malaysia’s trade surplus widened to RM9.3 billion.
Electronics Lead the Export Surge
The export strength was largely powered by manufactured goods, particularly:
Electronics & Electrical (E&E) products
Machinery and appliances
Optical & scientific equipment
OCBC attributed the surge to the ongoing global electronics upcycle and resilient demand from key markets including the US, China (Taiwan) and China (Hong Kong SAR).
Exports to the US surged 48.8% YoY, driving Malaysia’s trade surplus with the US to a record RM17 billion. However, export growth excluding the US slowed to 4.3% YoY, signalling more uneven momentum beneath the headline strength.
Domestic Demand Shows Through Imports
On the import side, consumption goods jumped 27.6% YoY in December after contracting the previous month, highlighting firm domestic demand. Passenger vehicle imports hit a record level, reinforcing signs of resilient household spending.
Inflation Picks Up, But Still Contained
Headline CPI inflation rose to 1.6% YoY in December from 1.4% in November, bringing 2025 average inflation to 1.4%. Core CPI edged higher to 2.3% YoY.
Price pressures were mixed, with increases seen in:
Alcohol & tobacco
Utilities
Communication
Education
Despite the pickup, inflation remains well within manageable levels.
2026 Outlook: Slower Growth, Policy Room Remains
Looking ahead, OCBC expects Malaysia’s growth to moderate in 2026:
GDP growth: 3.8% (from 4.9% in 2025)
Goods export growth: 2.2% YoY (from 6.5%)
Import growth: 4.3% YoY (from 6.2%)
The slowdown reflects softer external demand and a normalisation in investment spending.
Still, Malaysia’s fundamentals remain supportive, underpinned by:
Long-term national plans such as NIMP 2030 and the National Semiconductor Strategy
A robust infrastructure pipeline
Resilient investment inflows and a strong labour market
BNM Rate Cut Still on the Table
OCBC expects inflation to average 1.5% in 2026, giving Bank Negara Malaysia room to cut rates by 25 basis pointsthis year.
That said, the bank flags a key risk: if growth does not slow as expected, BNM may choose to stay on hold throughout 2026.
Investor Takeaway
Exports ended 2025 on a strong note, led by electronics
Inflation is firming but remains contained
2026 growth likely moderates, not collapses
Policy easing remains possible, but not guaranteed
Malaysia enters 2026 with momentum still intact — but the pace is set to cool.
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