KUALA LUMPUR, July 30 (Bernama) -- Bursa Malaysia's key index closed at an intraday high today, supported by continued buying interest even as renewed geopolitical tensions and a weaker overnight lead from Wall Street following the US Federal Reserve's (Fed) decision to stand pat on interest rates weighed on broader sentiment. The Fed has decided to hold rates steady for the fifth consecutive meeting, with the Federal Funds Rate unchanged between 3.50 per cent and 3.75 per cent. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 4.84 points to 1,720.40 from yesterday’s close of 1,715.56. The benchmark index, which opened 1.14 points lower at 1,714.42, hit its lowest level of 1,710.69 in early trade before gaining momentum for the rest of the day. However, the broader market was negative with losers outpacing gainers 581 to 411, while 612 counters were unchanged, 1,173 untraded, and 87 suspended. Turnover declined to 2.49 billion units valued at RM2.25 billion from ...
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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