Bursa investors await fresh leads as corporate results underway, US debt discussions weigh
KUALA LUMPUR: Concerns over rising US debt sent Wall Street equities lower overnight, ripples of which are weighing on the Malaysian stock market.
The benchmark FBM KLCI dropped 3.34 points to 1,541.46, putting the index on the back foot yet again after five consecutive days of losses.
Over at Capital Hill, US President Donald Trump is attempting to push through a budget bill, which the Congressional Budget Office estimates could add about US$2.3 trillion to the US national debt over the next 10 years.
TA Securities Research said the ongoing correction on the local market is owing concerns over the US fiscal deficit and downbeat economic outlook expressed by Federal Reserve officials.
"Traders remain concerned that a new budget bill could exacerbate the U.S. deficit, adding to economic uncertainty," it said in a note.
Meanwhile, Rakuten Trade said in its review it expects the local market to stay in consolidation mode given the lack of fresh catalysts.
"Still lacking any catalysts, we expect the local bourse to stay in consolidation mode with the index to oscillated between the 1,540-1,550 range today," it said.
Investors are expecting more profit results from Corporate Malaysia over the coming days as the first-quarter earnings period enters its stride.
Laggards in the opening minutes of trade included F&N down 56 sen to RM26.02, Hong Leong Bank dropping 18 sne to RM19.82, IE Industrial shedding 13 sen to RM4.06 and Gamuda slipping 10 sen to RM4.48.
Top actives were Ta Win unchanged at two sen, Velesto unmoved at 16.5 sen and Harvest Miracle down 0.5 sen to 18 sen.
Over in other parts of Asia, Japan's Nikkei was down 0.63% to 37,060 while Singapore's Straits Times index dipped 0.2% to 3,874.
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The Star
8 hours ago
- The Star
Is China's promise of a new world order a self-serving power play?
As China has found itself in the midst of a rapidly escalating trade war with the United States after President Donald Trump launched global tariff measures, Beijing launched a sweeping outreach strategy intended to strengthen ties with Russian and Southeast Asian trade partners while also welcoming Latin American and European stakeholders. The multifront diplomatic charm offensive has had at its core one clear message: a shift to a multipolar world is accelerating, and Beijing is ready to work with partners to defend the 'rules-based, UN-centred' international system that has underpinned economic globalisation since World War II. Beijing's message holds that the post-war order, once symbolised by multilateral cooperation, is now being challenged by Washington's retreat under the banner of 'America first'. Observers have watched as China has amplified this theme to court Europe and the Global South, framing itself as a defender of multilateralism and a responsible stakeholder in the post-war system in contrast to what Washington now offers. But the analysts have also cautioned that divergent world views and competing national interests – as well as the strategic calculations of countries seeking to balance or benefit from US-China tensions – could undercut Beijing's vision of a multipolar world. China has used its membership in diplomatic platforms, such as the United Nations and the World Trade Organization, to highlight its World War II sacrifices and contributions to the post-war international order. During a visit to Moscow last month, Chinese President Xi Jinping told his Russian counterpart Vladimir Putin that both sides should work together to defend their second world war legacies, as well as the rights of developing nations to pursue an 'equal and orderly' multipolar world. Victor Gao, vice-president of the Centre for China and Globalisation, said Beijing has been reminding the world of the origins of the post-war international system. 'The international order established in 1945 was not unilateral from the outset – it was built on multilateralism, centred around the United Nations,' he said. 'The US launch of a global tariff war ... deprives other countries' rights to development, which China opposes.' Since Xi came to power, China has advanced its vision of a multipolar world order through initiatives such as the Global Development Initiative (GDI), the Global Security Initiative, and the Global Civilisation Initiative – all aimed at providing an alternative to the Western development model. The Belt and Road Initiative has been central to these initiatives to empower developing economies, alongside the expansion of Global South-focused blocs such as Brics. At the China-Community of Latin American and Caribbean States (Celac) Forumlast month, Xi highlighted a 'shared identity' with the region, calling for 'independent development paths' and joint efforts to promote multipolarity and reform global governance. In a separate meeting with African diplomats, Foreign Minister Wang Yi invoked a 'common destiny' shaped by historical injustice. Similar themes were echoed during Xi's April visit to Southeast Asia, seen as a 'back door' for China's exports to circumvent trade restrictions from Washington, where he has prioritised neighbourhood diplomacy and supply chain resilience in response to US tariffs. Gedaliah Afterman, a Chinese foreign policy specialist at Israel's Reichman University, described Chinese advocacy for a multipolar world order as both 'ideological and strategic.' 'This narrative resonates across the Global South, where China positions itself as a champion of 'pluralism' and 'win-win cooperation',' he said. 'However, China's embrace of multipolarity is selective and self-serving. While it publicly promotes a world of diverse centres of power, in practice it seeks to structure this order in ways that amplify its own influence.' Through its trillion-dollar Belt and Road Initiative, China is expanding its footprint across developing regions, including Latin America, Africa, Southeast Asia and the Middle East. The areas have become key destinations for Beijing to diversify its exports and supply chains, while also offering access to critical minerals amid US export controls. Gustavo de Carvalho, a senior researcher on African governance and diplomacy at the South African Institute of International Affairs, said Latin American and African countries embrace China's multipolar vision where it provides 'tangible benefits', such as technology transfers, industrial upgrades and 'institutional alternatives'. Latin American and African countries including Brazil and South Africa – both Brics members – have often backed China's push to reform global governance in favour of Global South interests. But 'rather than endorsing any particular power's vision of world order', these countries have hedged their ties with the US and Europe alongside China amid the US-China rivalry, de Carvalho said. He cited African nations ramping up lithium and battery production to serve both Chinese and Western markets, and Latin American countries pursuing trade deals with the European Union while deepening their economic ties with Beijing. 'This represents calculated hedging rather than ideological conversion,' de Carvalho said. Similar hedging strategies have also been adopted by Middle Eastern countries, as they position themselves to benefit from a future multipolar structure, Afterman said. 'China has found receptive ground for its multipolar vision in the Middle East, especially among states seeking greater strategic autonomy from Washington,' he said. 'For Gulf monarchies and other regional actors, multipolarity is not about endorsing a new global order but about expanding strategic space. These countries seek to balance between the US, China, Russia and others to advance their national interests.' '[But] divergences become clear when China's vision intersects with contested regional dynamics or entrenched security architectures ... China's growing economic role is evident, but whether it has the will or capacity to assume a meaningful political or security role in the region remains an open question.' Many Middle Eastern nations have long been reliant on US security guarantees, and the region has returned to the forefront of Trump's 'America first' strategy. His recent visit to the region secured billions of dollars in AI-related investments – an arena of intense competition between Washington and Beijing. At last week's China-Asean Gulf Cooperation Council forum in Malaysia, Chinese Premier Li Qiang pledged to deepen regional economic integration, aiming to build a market where investment, technology and talent move freely. While many Southeast Asian nations have been open to China's call for a multipolar world, they have also been assessing whether Beijing was 'fully living up to' the ideals it has been pitching, especially when it comes to its approach on the South China Sea, according to Dylan Loh, a Chinese foreign policy specialist at Nanyang Technological University in Singapore. 'While [China] speaks of an equitable, multipolar and just world, [Southeast Asian] states are also assessing if this is the case. Its actions in the South China Sea, for instance, are seen by some as not fully aligning with some of the principles it espouses,' he said. Long-standing sovereignty disputes over the resource-rich region have strained China's relations with several Asean members. The contested waterway has also increasingly become a flashpoint for military tensions between China and US allies. Shi Yinhong, an international relations professor at Renmin University, said multipolarisation may offer smaller nations greater room to manoeuvre but also more pressure to choose sides. It remained doubtful that Trump's 'isolationism' would provide more room for China to increase its influence in the developing world, he added, noting that issues such as the South China Sea, Iran and Russia's war in Ukraine would continue to strain China's relations with Europe and the Global South. 'Apart from some limited and somewhat empty diplomatic gains, China's financial resources will be further squeezed, especially with that consumptive overseas involvement, if the Belt and Road Initiative has not been implemented effectively.' China has begun pivoting its belt and road spending toward more financially sustainable projects in green energy and hi-tech sectors as it continues to face economic headwinds. Many economists have predicted that sustained US tariffs would further slow its economy. Jo Inge Bekkevold, a Senior China Fellow at the Norwegian Institute for Defence Studies, said China's push for multipolarity has gained a lot of traction in the Global South, but less so in Europe. China has long seen the EU as a key pole in a multipolar world, urging Brussels to maintain 'strategic autonomy' as the bloc has aligned with Washington to counter Beijing's influence. EU-China relations have shown signs of thaw as transatlantic ties have been strained over Trump's tariffs and Ukraine policies. In a recent exchange of notes with European Commission President Ursula von der Leyen and European Council President Antonio Costa to mark 50 years of diplomatic ties, Xi called the EU a 'major force' in building a multipolar world alongside China. Bekkevold said Europe had not fully agreed with 'America's threat assessment of China' due to geographic distance, which has also allowed it more room to hedge and sustain economic ties with Beijing. At a May forum hosted by the EU delegation to China, European experts also pointed out that while Brussels and Beijing shared an interest in preserving UN-based multilateralism, their strategies and interpretations of it differed. When asked about possible EU cooperation with Brics, Justyna Szczudlik, deputy head of research and coordinator of the Asia-Pacific Programme at the Polish Institute of International Affairs, said Brics was 'China-led multilateralism', adding that the bloc had its 'own agenda' with the Global South. The EU has also diversified its global partnerships, recently signing a major trade agreement with the South American trade bloc Mercosur and pursuing a deal with India by year's end. According to Amit Ranjan, a China-India relations expert at the National University of Singapore, India saw multipolarisation as a way to gain influence in global governance. 'India also projects itself as an important player in world politics and world diplomacy. Therefore, India always calls for reformed multilateralism, because in the current multilateral structure, especially like the UN, it does not have a suitable space for New Delhi,' he said. Ranjan pointed to the UN Security Council, where India's bid for permanent membership has been blocked by China, which has been reluctant to share its status as the sole Asian permanent member amid concerns it could dilute Beijing's influence. Ranjan added that, like China, India has also considered itself a leader for the Global South and has been engaging with state players. Since 2023, India has hosted the annual Voice of Global South Summit with more than 100 nations taking part. It has long pushed back against China's dominance in Brics and the Shanghai Cooperation Organisation and has refused to endorse the Belt and Road Initiative. Additional reporting by Dewey Sim - SOUTH CHINA MORNING POST
BusinessToday
9 hours ago
- BusinessToday
What's The Next Catalyst For Markets?
Global equities, as measured by the MSCI All Country World Index, reached a new record high this week, fully recovering losses incurred since President Trump's 'Liberation Day' tariffs in early April. While trade tensions briefly resurfaced, concerns of an all-out trade war have abated following a crucial phone call between President Trump and China's President Xi, according to an editorial by Standard Chartered Bank. The market's attention is now turning to upcoming 'hard' economic data for May, specifically US non-farm payrolls and inflation figures. A softer US employment report combined with stable inflation could reignite expectations for a Federal Reserve rate cut, potentially propelling US equities to further record highs. Trade Dynamics and the 'Trump Put' This week saw President Trump double US tariffs on steel and aluminum imports to 50%, with the UK being the sole exemption after signing a preliminary trade pact. Despite facing court challenges and criticism for a perceived softening on trade, Trump may seek alternative legal avenues to impose targeted tariffs to encourage trade partners back to the negotiating table. However, Standard Chartered does not anticipate a full-blown trade war, especially after the Trump-Xi call aimed at resetting trade discussions. The bank noted that the 'Trump put' — the President's tendency to scale back aggressive trade stances when markets react negatively — remains in effect, citing his reversal of tariffs in April after a significant market downturn. Mixed US Economic Signals While trade tensions simmer, 'soft' US business confidence indicators, such as the ISM manufacturing PMI, remained in contractionary territory for May. The ISM service sector PMI, particularly its new orders component, turned contractionary for the first time in nearly a year, even as 'prices paid' continued to rise. In contrast, 'hard' real activity indicators have shown resilience, likely supporting household consumption. Timely job market data, like initial jobless claims, averaged around 235,000 in May, well below the 350,000 level that typically signals recessionary conditions. Fed Watch: Payrolls and Inflation Key The upcoming US employment and inflation reports for May are critical market drivers. Consensus estimates predict a slowdown in net job creation to 126,000 in May. A significant miss in the payrolls data, coupled with relatively stable core inflation (consensus at 2.9% year-on-year, 0.3% month-on-month), could increase the likelihood of the Fed resuming rate cuts from July, potentially pushing US equities to new peaks. Conversely, any tariff-driven surge in inflation would delay rate cuts, leading to a short-term consolidation in equity markets, though a significant pullback is not expected due to current bearish investor positioning in US equities. US Fiscal Policy and Global Currency Outlook The bank also highlights President Trump's proposed 'Big, beautiful bill' as a potential disruptor for bond markets if passed in its current form, given soaring deficit projections. However, Standard Chartered anticipates some tax incentive cutbacks, noting that elements like tax deductions on R&D, capex, and interest expenses could positively impact US earnings growth. In currency markets, Standard Chartered has turned bearish on EUR/JPY. Continued disinflation in the Euro area, exacerbated by US tariffs, raises the prospect of further ECB rate cuts in the second half of the year, following this week's 25 basis point reduction to 2.0%. Euro area core inflation recently hit a three-year low of 2.3%. Meanwhile, the Japanese Yen (JPY) is expected to appreciate amid global growth uncertainty, with the Bank of Japan likely to hike rates further as inflation consistently exceeds its 2% target. Related
The Star
9 hours ago
- The Star
Penang govt to study decision on 5% discount for first-time homebuyers among Indian Muslims, says Sim
GEORGE TOWN: The Penang government will review its decision to offer a 5% discount to first-time homebuyers among the Indian Muslim community for one year before implementing it, says Steven Sim. The Penang DAP chairman said he had discussed the matter with Chief Minister Chow Kon Yeow, adding that the latter agreed the matter to be brought up for review and discussion at the upcoming state executive council meeting. "I take note of the public feedback regarding the 5% discount given to the Indian Muslim community for the purchase of unsold (overhang) property units in Penang," he said in a statement. Sim said it is important for the state government to continue upholding the principles of social justice and to ensure that the right of every Malaysian to own a home is protected. Earlier, state housing committee chairman Datuk Seri S. Sundarajoo said the state government has approved measures to revitalise the property sector. Sundarajoo said the decision was made during the state executive council meeting on Saturday (June 7) and the state planning committee meeting on Tuesday (June 3), following discussions with housing industry stakeholders. He, however, said the discount excludes bumiputra quota units and does not affect existing housing policies. The provision of the discount is based on developers' social responsibility and does not involve financial support or subsidies from the state government. Meanwhile, state MCA secretary Yeoh Chin Kah criticised the state government over the measure, questioning if it introduces a new form of racial quota. He questioned why the Penang government couldn't base its housing policy on economic status rather than race and religion and said that DAP is promoting a "Malaysian Malaysia" while introducing racial policies that divide society.
