Stocks climb, but market activity continues to thin
The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) has posted gains for four consecutive months, rising from 1,513.65 in March to 1,548.99 as of July 3.
Over the same period, total market capitalisation increased by more than RM60 billion, from RM1.87 trillion to RM1.93 trillion.
However, this rebound in valuations has not been matched by liquidity.
In June, the total value of shares traded on Bursa Malaysia dropped to RM43.1 billion, the lowest monthly figure in over a year.
That marks a decline of more than 60 per cent from RM109.3 billion recorded during the peak in July 2024. Market volume has also fallen, from 109 billion units to 59 billion.
There was a pickup in early July, with RM5.2 billion in turnover on July 3, one of the highest daily totals so far this year.
However, with only a few trading days into the month, it remains too early to tell whether this signals a sustained shift in sentiment or a temporary uptick.
While the rise in capitalisation may point to renewed institutional interest or selective accumulation of blue-chip stocks, the declining participation rate suggests that many investors, particularly retail players, remain cautious.
This comes against a backdrop of subdued global risk sentiment, persistent inflationary pressures and continued capital outflows from emerging markets.
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New Straits Times
11 hours ago
- New Straits Times
MNCF: Cycling is not a rich man's sport, reconsider SST
KUALA LUMPUR: The Malaysia National Cycling Federation (MNCF) hopes the government will reconsider its decision to impose a 10 per cent tax on racing bikes under the expanded Sales and Service Tax (SST) scheme. MNCF secretary Arif Astaman said the move, which came into effect July 1, will affect development costs in the sport at both the grassroots and high-performance levels. Racing bikes - better known as road bikes - were previously exempted from SST. "There is an unfair perception that cycling is a rich man's sport which in reality is far from the truth," said Arif when contacted today (July 5). "None of the riders in our programmes are from the T5 or T10 (income bracket) families. Those who the authorities perceive to be rich are recreational riders who ride their RM50,000 to RM60,000 super bikes to Pangsun on the weekends. "As soon as the (tax) announcement was made we, the federation, wrote a letter to the Finance Minister (Datuk Seri Anwar Ibrahim), asking for the government to reconsider it. "And if a reversal or reduction in tax is not possible, we have asked the government to consider giving us the power to issue end user certificates (for purpose of tax exemption) for riders under national and state development programmes. "End user certificates have already been implemented by various government agencies and we ask that this power be extended to us as well. "MNCF and the National Sports Council should have the authority to certify riders who are eligible for exemption from the tax when there is a need to buy new bikes for them. "Otherwise, this new tax would cause a significant increase in costs for us to run programmes when in fact, these programmes are partly funded by the government itself. "To add to that, there are no local Malaysian manufacturers or brands which produce racing bikes who need to be protected, such as in the automotive industry." Arif added that the SST levied on racing bikes could cause parents to direct their children to other, more affordable, sports. "Long before this SST on road bikes, other types of bikes such as BMX, folding and mountain bikes as well as items such as helmets, cycling shoes and spare parts have been charged a 15 per cent sales tax," said Arif. "This is less than ideal when we are trying to advocate cycling for all and is something we have asked customs to reconsider for a while now." Malaysia Pro Cycling (MPC) team principal Sayuti Zahit believes taxation on bikes should be implemented using a tiered system. "I believe bikes under RM10,000, which for the most part only gets you an entry level road bike, should not be taxed," said Sayuti when contacted today (July 5). "The tax should be gradually increased for bikes above that, or perhaps only start taxing once bikes are above RM30,000. "Otherwise, this would place a huge burden on parents who may already be struggling to pay RM3,000 to RM5,000 for a bike for their 13-year-olds who are only starting to get involved in junior programmes." Sayuti admitted that the SST on racing bikes is likely to hit MPC, a UCI continental road racing team, hard. "High-end racing bikes cost a lot of money, especially time trial bikes. A time trial bike that would normally cost us RM70,000 would now cost us RM77,000, that is a lot for us," he said. "Although we do have a sponsorship deal with bike manufacturers, we only get a discount and do not get our bikes for free." While they may sound like simple sports to the uninitiated, road and track cycling racing are both technologically advanced disciplines. A huge emphasis is placed on aerodynamics, structural rigidity, weight saving as well as drivetrain efficiency when producing racing bikes. A decent bike for professional road racing costs in the region of RM40,000 to RM60,000. Time trial bikes cost even more while at the top end are track racing bikes. The Vorteq WX-R track bikes used by the national squad at the 2020 Tokyo and 2024 Paris Olympics cost RM20.5 million to develop over the two Olympic cycles and was listed at RM300,000 retail, per bike.
New Straits Times
20 hours ago
- New Straits Times
Will there be stability in 2H?
AS we draw the curtain on the first half of 2025 (H1 2025), one thing is clear: the road has been anything but smooth. Markets have been tossed by crosscurrents of global conflict, policy shocks, and investor anxiety. And yet, through all the noise, Malaysia has held its ground. The FBM KLCI, though not immune to volatility, demonstrated tenacity, underpinned by resilient fundamentals and steady macro stewardship. In an environment where the unexpected became the norm, Malaysia remained a beacon of relative calm in a turbulent world. Flashpoints and Fallout: How Global Conflict Reshaped Market Behaviour Few forces rattle markets more swiftly than war and H1 2025 offered no shortage of flashpoints. The Middle East conflict escalated dramatically with Israeli strikes on Iranian nuclear facilities, drawing U.S. military support and spurring global fears of a wider confrontation. For Malaysian markets, this sparked a sharp risk-off pivot. Oil prices surged, lifting our Energy Index, but equity sentiment broadly softened as capital moved to safe havens. Meanwhile, the protracted Russia-Ukraine war continued to strain global commodity supply chains. Elevated palm oil prices offered some tailwind to local plantation counters, but the ripple effects, particularly in feedstock costs were a reminder of our embeddedness in a fragile global supply web. Tariffs, Tensions and the Trade Trap: Navigating a Fragmented Global Economy The Trump administration's sweeping tariffs, peaking at 145 per cent on Chinese imports sent shockwaves through global supply chains. Malaysia, deeply integrated into regional manufacturing, absorbed the aftershocks. Our exporters, especially in semiconductors and renewables, were caught in the crossfire. The FBM KLCI fell over five per cent on April 2 following intensified tariff rhetoric, with risk assets broadly repriced. Adding to the strain, Malaysia was slapped with a 34.4 per cent import duty on solar panels, an outsized blow to our green energy sector. Global investors fled to safety; gold prices soared past US$3,400/oz. Yet amid this, the ringgit showed quiet strength, rising 0.8 per cent in Q1, a nod to investor faith in Malaysia's fiscal prudence. Relief came in May, when the US and China moved to de-escalate. Tariff rates were rolled back US duties cut to 30 per cent, China's to 10 per cent and a 90-day pause was announced. The KLCI rallied 2.33 per cent, buoyed by returning risk appetite and hopes of normalised trade flows. Still, unpredictability looms large, and any re-escalation will test Malaysia's resilience again. Rates, Risk, and Resilience: How Policy Signals Shaped Investor Positioning The global interest rate landscape was the third pillar shaping investor behaviour in H1. The US Fed held rates at 4.25-4.50 per cent, cautioning against premature easing due to tariff-induced inflation risks. This 'higher-for-longer' narrative kept a lid on valuations for rate-sensitive sectors like property and tech. However, a cooling inflation trend and softening growth expectations rekindled hopes for Q4 rate cuts. The ringgit appreciated about five pe rcent against the US dollar in H1, making it one of the strongest Asian currencies this year. It was further supported by RM13.4 billion in net foreign bond inflows, a testament to Malaysia's safe haven appeal in the region. Bank Negara Malaysia, staying its course with an OPR at 3.00 per cent, has successfully struck a delicate balance between supporting growth and anchoring inflation. Outlook for H2 2025: From Turbulence to Tactical Positioning As we pivot into the second half of 2025, investors must brace for persistent global volatility but also recognise the windows of opportunity it presents. The geopolitical landscape remains fluid. Any breakthrough in the Middle East or progress in the Ukraine conflict could unlock relief rallies, while renewed hostilities may keep risk appetite in check. Malaysia's equity markets are particularly sensitive to oil price volatility, where sharp spikes could strain inflation and subsidies, but also boost energy-linked counters. On the trade front, August's US-China tariff truce deadline looms large. If it leads to a lasting deal, Malaysia's export engine could rev up again, rewarding tech, logistics, and manufacturing sectors. If talks break down, investors should expect a return to defensive positioning. Staying nimble and sector-focused will be critical. Monetary policy remains the market's compass. With the Fed signalling possible Q4 rate cuts, global liquidity may begin to normalise. A weaker US dollar could strengthen the ringgit further and revive foreign flows. Bond yields may stabilise, benefitting capital-intensive and domestic consumption-driven sectors. Bank Negara Malaysia may join the easing cycle but is likely to remain data-dependent. Investors should track inflation trends and fiscal reform progress, especially the targeted subsidy rollout. Tactically, there is scope for selective sector rotation. Technology and construction may outperform if growth tailwinds return, while banks stand to benefit from loan growth recovery. Commodities and plantations remain tied to global cycles, but with El Niño risks and robust palm oil demand, upside remains plausible. Bottom line: H2 2025 is not without risk, but it offers a chance for calculated gains. Patience, diversification, and readiness to reposition swiftly will be key. Malaysia, underpinned by sound governance and regional relevance, remains a compelling story for long-term investors looking to turn uncertainty into strategic opportunity. The turbulence of early 2025 may well give way to calmer - or at least more predictable - seas, in which the Malaysian economy and the FBM KLCI can find firmer footing. Conclusion: Staying Strategic in a Shifting Landscape In light of continued volatility, Malaysian investors may consider the following actions: 1. Diversify across resilient sectors. Exposure to infrastructure, domestic services, and financials may help buffer external shocks. 2. Reassess export-heavy positions. Monitor global demand and currency strength, especially for manufacturing and E&E sectors. 3. Stay defensive where needed. Utilities and consumer staples offer stability when uncertainty prevails. 4. Use safe-haven assets selectively. Gold's sustained strength reinforces its role in hedging macro risk. 5. Monitor macro and policy shifts closely. Policy changes at home and abroad will shape sector leadership and capital flows. Ultimately, investing in uncertainty is not about avoiding risk, but managing it. In a world shaped by rapid change, staying informed, agile and disciplined will be the hallmark of successful strategies. Malaysia remains well-positioned, with strong governance, regional relevance, and compelling valuations to weather short-term turbulence and unlock long-term growth. *The writer is the head of dealing at Moomoo Malaysia.
New Straits Times
20 hours ago
- New Straits Times
Stocks climb, but market activity continues to thin
KUALA LUMPUR: Bursa Malaysia's stock market has been on a gradual recovery in recent months, but trading activity suggests investor caution remains, according to the exchange's latest statistics. The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) has posted gains for four consecutive months, rising from 1,513.65 in March to 1,548.99 as of July 3. Over the same period, total market capitalisation increased by more than RM60 billion, from RM1.87 trillion to RM1.93 trillion. However, this rebound in valuations has not been matched by liquidity. In June, the total value of shares traded on Bursa Malaysia dropped to RM43.1 billion, the lowest monthly figure in over a year. That marks a decline of more than 60 per cent from RM109.3 billion recorded during the peak in July 2024. Market volume has also fallen, from 109 billion units to 59 billion. There was a pickup in early July, with RM5.2 billion in turnover on July 3, one of the highest daily totals so far this year. However, with only a few trading days into the month, it remains too early to tell whether this signals a sustained shift in sentiment or a temporary uptick. While the rise in capitalisation may point to renewed institutional interest or selective accumulation of blue-chip stocks, the declining participation rate suggests that many investors, particularly retail players, remain cautious. This comes against a backdrop of subdued global risk sentiment, persistent inflationary pressures and continued capital outflows from emerging markets.
