KUALA LUMPUR, May 25 (Bernama) -- Bursa Malaysia closed lower on Monday as investors turned cautious, with profit-taking emerging in selected heavyweights, amid rising global bond yields and ahead of the US inflation release. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 4.17 points, or 0.24 per cent, to 1,708.50 from Friday’s close of 1,712.67. The benchmark index opened 1.24 points lower at 1,711.43 and moved between 1,705.94 and 1,713.50 throughout the session. Market breadth was negative, with losers outpacing gainers 619 to 419, while 565 counters were unchanged, 1,095 untraded and 59 suspended. Turnover fell to 3.06 billion units worth RM3.17 billion compared with 3.68 billion units worth RM3.58 billion on Friday.
Singapore’s economy delivered a strong upside surprise in 1Q2026, supported by robust AI-driven demand, even as authorities flagged rising risks from Middle East tensions and global trade uncertainty.
GDP Growth Exceeds Forecasts
Singapore’s economy expanded:
- +6.0% YoY in 1Q2026 (vs 5.7% in 4Q2025)
- Above forecasts of ~5.2% (Bloomberg) and 4.6% (Reuters)
On a quarter-on-quarter basis:
- +1.0% QoQ, beating expectations of a contraction
This reflects strong underlying economic momentum, particularly in tech-related sectors.
AI Demand Drives Key Sectors
Growth was largely supported by AI-related investments, boosting:
- Electronics and precision engineering
- Machinery and equipment trade
- Wholesale trade segment (+11.7% YoY)
The government expects AI semiconductor demand to remain strong, anchoring industrial growth.
Sector Performance Mixed
Key sector highlights:
- Manufacturing: +7.9% (slower vs 11.4% previously)
- Construction: +11.8% (sharp acceleration)
- Retail trade: +2.6% (improving consumption)
- Real estate: +3.1% (moderating growth)
However, biomedical and chemicals segments contracted, reflecting external pressures.
Outlook Maintained Despite Rising Risks
The government maintained its 2026 GDP forecast at 2%–4%, but warned of heightened downside risks, including:
- Energy disruptions from Middle East conflict
- Renewed US tariff actions
- Potential slowdown in global AI investment cycle
Notably, oil refineries and petrochemical firms have reduced operations, with some declaring force majeure.
Inflation and Policy Tightening in Focus
The Monetary Authority of Singapore has already tightened policy, citing:
- Rising energy-driven inflation risks
- Upgraded inflation forecast to 1.5%–2.5%
This suggests a more cautious policy stance ahead.
Investor Takeaways
- Singapore’s GDP growth surprised on the upside, driven by AI-related demand.
- Electronics and trade sectors remain key growth engines.
- Geopolitical and energy risks are rising, impacting petrochemical activity.
- Growth outlook remains intact, but downside risks have increased.
- Investors should watch AI demand sustainability and inflation trends closely.
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