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New Straits Times
2 days ago
- Business
- 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
23-06-2025
- Business
- New Straits Times
Bursa's Energy Index breaks from pack on oil price rally
KUALA LUMPUR: Bursa Malaysia's Energy Index rose to the top of sectoral gainers, driven by a global rally in oil prices amid heightened geopolitical tensions in the Middle East. It was the only index to post a gain of over one per cent, bucking the broader downtrend across sectors that persisted into the afternoon session. As at 3pm, the 31-stock Energy Index had climbed 1.32 per cent, or 9.73 points, to 745.44. Year-to-date, the index is still down 10.23 per cent. Reservoir Link Energy Bhd, Hibiscus Petroleum Bhd and Dialog Group Bhd were among the most actively traded counters fuelling the sector's gains. At press time, Reservoir Link rose 1.35 per cent to 37.5 sen. The counter was the third most active with nearly 40 million shares changing hands, its highest single-day volume in at least six months. Hibiscus Petroleum led the gainers in the oil and gas space, surging 7.02 per cent or 12 sen to RM1.83 on 17.21 million shares traded. Bumi Armada Bhd edged up half a sen to 47.5 sen, while Dialog Group Bhd added four sen, or 2.60 per cent, to RM1.58 with 6.32 million shares traded. The rally in energy stocks followed a spike in global crude oil prices after United States military strikes on Iran intensified concerns of supply disruptions in the Middle East. Brent crude futures for August rose 2.4 per cent to US$79 a barrel, while West Texas Intermediate (WTI) climbed 2.5 per cent to US$73.84. Both benchmarks had earlier jumped as much as four per cent to hit four-month highs, with Brent briefly touching US$81 a barrel. At the time of writing, Brent and WTI were trading at US$77.51 and US$74.31 respectively, both up about 0.65 per cent on the day and marking their highest levels in a month. In Tehran, Iranian Supreme Leader Ayatollah Ali Khamenei vowed retaliation against "the Zionist enemy" in his first public statement since the US joined Israel's attacks on Iran. Market participants anticipate further price gains as fears grow that Iran may retaliate by closing the Strait of Hormuz, a vital chokepoint for about one-fifth of the world's crude oil supply. Back home, the FTSE Bursa Malaysia KLCI rose 0.51 per cent, or 7.62 points, to 1,510.36, rebounding from last Friday's close of 1,493.19. Apart from energy, financial services was the only other sectoral index in the green, up 0.43 per cent. The day's biggest sectoral decliners were the Transportation & Logistics, Technology, and Healthcare sectors, which fell 1.28 per cent, 1.23 per cent and one per cent respectively.
Al Etihad
03-05-2025
- Business
- Al Etihad
UAE markets defy global volatility, post strong gains in April
3 May 2025 13:52 REDDY (ABU DHABI)In a month marked by sharp volatility in global equity markets, the UAE's stock exchanges bucked the global trend to post solid gains in April 2025, with the Dubai Financial Market (DFM) emerging as the top-performing bourse in the GCC. According to Kamco Invest's latest monthly report, both the Abu Dhabi Securities Exchange (ADX) and DFM not only recovered from previous losses but also attracted renewed investor interest on the back of improved trading activity and robust sectoral FTSE ADX General Index rose 1.8% during April to close at 9,534.33 points, reversing the declines seen in February and March. This pushed its year-to-date (YTD) gain to 1.2%, supported by a noticeable uptick in volumes and value traded. Meanwhile, the DFM General Index surged by 4.1% to end April at 5,307.15 points, positioning it as the best performer among all GCC markets for the month. Its YTD gains climbed to 2.9%.'The performance of UAE equity markets was impressive, especially against the backdrop of global equity market turmoil driven by tariff-related uncertainties,' Kamco Invest noted. 'Dubai led the region with broad-based gains, while Abu Dhabi benefited from strong rebounds in select sectors and stocks.'In Abu Dhabi, the monthly recovery was anchored by robust performances in the Basic Materials and Financials sectors. The Basic Materials Index led all sectoral gains with a 6.1% increase, powered by share price advances in Fertiglobe (+7.1%) and Borouge (+5.7%). Financials followed with a 3.0% rise, boosted by Multiply Group and Abu Dhabi Islamic Bank, which surged 28.9% and 14.1%, five of the 10 ADX sectoral indices ended in positive territory, the Utilities and Energy sectors dragged overall gains. The Utilities Index plunged 9.7%, mirroring the share price fall of Abu Dhabi National Energy Company. Similarly, the Energy Index dropped 2.4% as all four of its constituents posted losses. Nevertheless, trading activity was vibrant with the value of shares traded rising 21.5% month-on-month to Dh25.88 billion. Volume also improved by 33.3% to 7.6 billion shares. International Holdings Company, ADNOC Gas, and Multiply Group topped the value-traded chart, while Multiply also led in traded volume.'The rebound in the Abu Dhabi market came on the back of strong performances from major financial and industrial names, even as energy-related counters remained under pressure,' Kamco Invest analysts said in the momentum in the Dubai bourse was even stronger. The Financial Index rose by 5.9%, bolstered by a 22.8% surge in Commercial Bank of Dubai and a 16.4% rise in National General Insurance. The Communication Services Index led all sectors with a gain of 7.9%, solely driven by Emirates Integrated three of the eight sector indices declined, including a steep 22.7% drop in the Materials sector due to a fall in National Cement Company, the index was lifted by the strong showings from the heavyweight sectors. DFM's total value traded climbed 13% in April to Dh12.82 billion, while volumes grew 33% to 4.7 billion shares. Emaar Properties topped the value-traded list with Dh3.9 billion, followed by Dubai Islamic Bank and to the monthly stock performance from Bloomberg, Commercial Bank of Dubai topped the monthly gainers table with a 22.8% jump in share price followed by National General Insurance and Air Arabia with gains of 16.4% and 12.9%, respectively.'The broad-based participation from financial and telecom stocks helped DFM register the best returns in the region, indicating renewed investor confidence in Dubai's growth narrative,' Kamco Invest solid performance of UAE markets stood out in a month when most global and regional indices faced headwinds from tariff wars and declining investor sentiment. Kamco pointed out that while the MSCI GCC Index slipped 1.2% in April, the UAE's major bourses were able to deliver net-positive the UAE markets retained appealing valuation levels. ADX ended April with a trailing P/E ratio of 20.99 and a dividend yield of 2.4%, while DFM posted a more impressive P/E of 9.53 with a comparatively higher dividend yield of 5.6%. Adding to the positive economic backdrop, Abu Dhabi's real estate sector continued to expand, with ADREC reporting a 34.5% year-on-year increase in the value of Q1 property transactions to Dh25.3 billion, including a notable rise in foreign investment. Dubai, too, saw tourism growth, recording 5.31 million visitors in Q1, up 3.3% year-on-year, providing tailwinds to sectors such as real estate, hospitality, and consumer services.
