Tariff uncertainty to weigh on Bursa Malaysia next week

New Straits Times

27-07-2025

KUALA LUMPUR: The risk of higher United States (US) tariffs on Malaysia as the Aug 1 deadline draws near is likely to weigh on Bursa Malaysia next week, although domestically-oriented counters are expected to remain relatively resilient, supported by firm internal demand and fiscal tailwinds.
UOB Kay Hian Wealth Advisors Sdn Bhd head of investment research Mohd Sedek Jantan said volatility is expected to intensify as markets approach a critical inflection point in global trade policy.
"Domestically-oriented counters on Bursa Malaysia are likely to remain relatively resilient. However, export-driven sectors may continue to face pressure in the absence of a favourable resolution to the tariff negotiations," he told Bernama.
He noted that no formal announcement has been made on the revised US tariff schedule for Malaysia.
"Should Malaysia succeed in securing a rate below the symbolic 20 per cent threshold, we anticipate renewed investor interest, particularly in the manufacturing and electrical and electronics sectors. Until then, most investors are expected to adopt a wait-and-see approach, prioritising capital preservation over risk-taking," he said.
Regionally, market focus is shifting towards renewed US–China trade diplomacy as Chinese Vice Premier He Lifeng is set to lead high-level negotiations in Sweden from July 27–30, ahead of the expiry of the 90-day tariff suspension on Aug 12.
"The outcome will be instrumental in shaping regional trade sentiment and broader market tone heading into August," Mohd Sedek said.
Globally, investor attention remains fixed on a packed US macroeconomic calendar, particularly with the upcoming the Federal Open Market Committee meeting on July 30, the June Personal Consumption Expenditure inflation print and July non-farm payrolls, which will provide important policy signals.
Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said market participants will turn their focus to China's July Purchasing Managers Index as well as Eurozone Consumer Price Index.
For the week just ended, optimism spurred by Prime Minister Datuk Seri Anwar Ibrahim's "appreciation package" and renewed confidence in domestic fiscal support lifted utilities and consumer counters, but the momentum proved short-lived as broad-based selling later overshadowed mid-week support from telco stocks.
For the week under review, the benchmark index rose 7.90 points to 1,533.76 on Friday from 1,525.86 a week earlier.
The FBM Emas Index increased 26.99 points to 11,506.82 and the FBMT 100 Index gained 28.03 points to 11,269.72, but the FBM Emas Shariah Index slid 8.89 points to 11,528.98, the FBM 70 Index dipped 90.15 points to 16,607.57 and the FBM ACE Index dropped 32.77 points to 4,639.02.
By sector, the Financial Services Index jumped 99.4 points to 17,454.23, the Plantation Index reduced 7.10 points to 7,434.79 and the Energy Index went up 0.21 of a point to 739.85.
Weekly turnover narrowed to 11.92 billion units worth RM11.43 billion from 15.53 billion units worth RM11.77 billion in the previous week.
Main Market volume slid to 6.63 billion units valued at RM9.70 billion compared with 6.73 billion units valued at RM10.07 billion previously.
Warrant turnover grew to 7.10 billion units worth RM1.15 billion from 6.83 billion units worth RM966.72 million in the preceding week.
ACE Market volume shrank to 1.68 billion units valued at RM577.05 million versus 1.97 billion units valued at RM729.96 million previously.