Latest news with #KualaLumpurCompositeIndex
New Straits Times
13-05-2025
- Business
- New Straits Times
US-China tariff cuts to lift Malaysian equities, KLCI target held at 1,657
KUALA LUMPUR: The temporary tariff reduction agreement between the US and China is seen as a positive development for the equity market, as it lowers the likelihood of a US or global recession and could encourage greater net foreign investment in equities. Under the deal, the US will scale back its additional tariffs on Chinese goods from 145 per cent to 30 per cent, while China will reduce its tariffs on US imports from 125 per cent to 10 per cent. According to CIMB Securities, the banking sector stands to gain from this trend due to its strong liquidity position and its close ties to the domestic economic landscape. "The plantation sector may also benefit from stronger global edible oil demand and higher crude oil prices if the broader economy improves," it said. The firm noted that in the technology sector, easing trade tensions may boost global demand for semiconductors, with Malaysian tech companies expected to maintain their competitive advantage, as US tariffs on Chinese products remain significantly higher than those on Malaysian exports. "We believe Malaysian glove manufacturers continue to enjoy a cost advantage, as US tariffs on Malaysian imports remain at 10 per cent, compared with the reduced 30 per cent tariff imposed on Chinese imports," it said. CIMB Securities has kept its target for the Kuala Lumpur Composite Index (KLCI) at 1,657 points and plans to reassess this forecast after the first quarter of 2025 (1Q25) earnings season. "We continue to prefer domestic-oriented companies with stable dividend yields, particularly in the banking, telecommunications, utilities, construction, and healthcare sectors, to provide shelter from tariff-related headwinds," the firm added. However, CIMB Securities cautioned that uncertainties remain regarding the nature of the agreement that will result after the 90-day period and whether the current easing of tensions will be maintained. "Additionally, US tariffs on China, although reduced to 30 per cent, remain significantly higher than the 10 per cent tariff currently imposed on other trading partners," CIMB Securities added.
New Straits Times
11-05-2025
- Business
- New Straits Times
KLCI outperforms regional markets with 1.8pct April surge
KUALA LUMPUR: The Kuala Lumpur Composite Index (KLCI) climbed 1.8 per cent to reach 1,540 points in April 2025, outperforming both the Morgan Stanley Capital International (MSCI) Emerging Market Index and the MSCI All Country Asia ex-Japan Index. According to CGS International, within the Asean region, the KLCI outshone Singapore's Straits Times Index (STI), which was the only market to post a decline for the month, dropping 3.5 per cent month-on-month (MoM). Out of the 13 sectoral indices on Bursa Malaysia, five posted gains in April, with telecommunications, consumer, and healthcare emerging as the top three performers, recording MoM increases of 4.9 per cent, 4.2 per cent, and 3.4 per cent, respectively. In contrast, the energy sector was the weakest performer, slumping 9.2 per cent MoM, followed by transport and technology, which fell by 5.3 per cent and 4.7 per cent, respectively. "Out of the 30 KLCI companies, 20 posted share price gains in April 2025, with the three best performers on a mom basis being MR DIY Group (M) Bhd (19.1 per cent), Axiata Group Bhd (17.3 per cent), and Nestle (Malaysia) Bhd (17.1 per cent). "Notably, consumer and telco names made up eight of the top 10 gainers in the KLCI, which we think was due to the market shifting towards names with more domestic exposure that are relatively shielded from global uncertainties," it said. CGS International said Bursa Malaysia's average daily trading value dropped by 17.8 per cent month-on-month (MoM) to RM2.2 billion, while the average daily trading volume declined by 4.5 per cent MoM to three billion units. "We believe the stock market remained jittery and tentative in its trading in April, as President Donald Trump's Liberation Day tariff announcement on April 2 led to the market declining further before recovering as he subsequently announced a 90-day pause on additional tariffs above the baseline 10 per cent rate applicable to all countries. "This likely led to the mom decline in Bursa Malaysia's average trading value and volume, as investors stayed cautious amidst global geopolitics and economic uncertainties," it said. CGS International noted that the KLCI had a turbulent start to 2025, driven by external factors such as the US's restrictions on AI chips and newly re-elected President Trump's aggressive tariff measures. The firm acknowledged the ongoing macroeconomic uncertainties, highlighting that the unpredictability of US trade policy could negatively affect corporate earnings in Malaysia and weigh on overall market sentiment. "Our end-2025 KLCI target is 1,680 points," it added.
