MARC: Positive outlook for Malaysian market following US-china 90-day tariff pause

The Star

14-05-2025

KUALA LUMPUR: The Malaysian market outlook remains positive following the recent 90-day pause in the trade dispute between the United States (US) and China, according to Malaysian Rating Corp Bhd (MARC).
Group chief executive officer Arshad Mohamed Ismail noted that the government has taken proactive steps to mitigate the impact of US tariffs.
He said the domestic bond and sukuk markets continue to demonstrate ample liquidity.
"Given the latest progress in negotiations between the US and China, the current outlook appears encouraging. However, continuous monitoring of developments is essential,' he told Bernama on the sidelines of the MARC Lead Managers' League Table Awards 2024.
On the credit front, Arshad stated that availability should not be a concern, though it will ultimately depend on issuer demand.
He added that some issuers with significant exposure to US markets may be more sensitive to tariff developments and should closely track the ongoing negotiations.
Meanwhile, Arshad said Malaysia is well-positioned to reach a mutually beneficial arrangement, given the encouraging progress in negotiations between the US and China.
He said the relevant policymakers are approaching the situation with sound judgment to ensure outcomes that are advantageous to all stakeholders.
Additionally, Arshad said MARC projects Malaysia's gross domestic product growth for 2025 to be a moderate 4.4 per cent, which he described as still a commendable figure.
In his welcome speech, he said the capital market cannot overlook the growing challenges in today's global landscape, including heightened geopolitical risks, persistent inflation, and uncertain trade policies -- particularly from the US -- as well as shifting regulatory environments, with regions like the US and Europe beginning to loosen their monetary policies.
He said the pace and extent of these moves will largely depend on their respective inflationary conditions, and these shifts could influence liquidity flows into emerging markets like ours, offering both opportunities and risks.
"For the bond market specifically, elevated interest rates may increase borrowing costs and moderate demand for fixed-income instruments.
"Issuers must remain fragile and investors will need to assess risk-adjusted returns with greater scrutiny,' he said.
Earlier, Johor Plantations Group Bhd and its principal advisor and lead arranger, Maybank Investment Bank Bhd, bagged MARC's special award, the Most Innovative Sustainable Finance Deal Award, which recognised the RM1.35 billion sustainability-linked sukuk wakalah.
AmInvestment Bank Bhd has emerged as the leader in the Issue Count category, while Maybank Investment Bank Bhd clinched the Issue Value category. - Bernama