US–China Trade Agreement Lifts Bursa Malaysia Sentiment Amid Global Relief
US–China Trade Agreement Lifts Bursa Malaysia Sentiment Amid Global Relief

US–China Trade Agreement Lifts Bursa Malaysia Sentiment Amid Global Relief

Fri, Jun 13, 2025 11:03 AM

Bursa Malaysia experienced a slight rebound this week, buoyed by improved investor sentiment following a framework agreement between the United States and China to ease trade tensions. The FBM KLCI rose 0.45% to close at 1,523.84 on 11 June 2025, underpinned by strong buying from local institutions and an uptick in global risk appetite. The trade truce, which involves a 90-day pause in tariffs and a commitment to further negotiations, has sent a positive signal to markets worldwide.

What Does It Mean to The Market?

For Bursa Malaysia, the deal represents more than just a temporary lift; signaling potential medium-term opportunities for key domestic sectors.

Investors responded immediately to the news. The FBM KLCI’s gain of 6.89 points on Wednesday was accompanied by a rise in total trading volume to 3.27bn shares valued at RM2.6bn; higher than the previous session. Market breadth also improved, with 431 gainers outpacing 318 losers.

This rally was in line with regional peers, as Asian markets including Hong Kong, Tokyo, and Seoul also posted gains. The synchronized uptrend highlighted renewed confidence across emerging markets, especially in export-oriented economies like Malaysia.

What Should You Know?

Rakuten Trade Research Team expects countries with lower tariffs and solid economic fundamentals, like Malaysia, stand a better chance of weathering this storm with limited damage compared to regional peers.

Power and utilities sectors are expected to see improved prospects. TENAGA estimates data centres will require 5,000MW by 2035, accounting for 15%-20% of total electricity usage..

What are the Key Sectors to Watch?
  • The Banking Sector

Banks serve as financial intermediaries by channeling funds from savers to borrowers, supporting capital formation for individuals, SMEs, and large firms. This credit access drives consumption, investment, housing, and business growth, thereby stimulating the domestic economy. Rakuten Trade Research recommends Maybank, CIMB and Hong Leong Bank

  • Construction

The sector is expected to remain robust with strong public infrastructure works worth more than RM180bn and the expanding data centre projects. Our Research Team views We also view the Johor-Singapore Special Economic Zone (JS-SEZ) may become the epi-centre for construction activities. Our Research Team’s top picks are GAMUDA, IJM, WCT, KIMLUN and KERJAYA.

Caution Still Warranted

While optimism has returned to the local bourse, market participants remain cautious. The agreement between Washington and Beijing is still in its early stages, with few concrete details disclosed. Market watchers are wary that the current truce could unravel if progress stalls in follow-up negotiations.

Moreover, global investors are closely monitoring US inflation data and Federal Reserve policy moves, which could still impact emerging markets like Malaysia in the short term.

Outlook

For now, the US-China trade truce has breathed new life into Bursa Malaysia, lifting investor sentiment and offering a potential tailwind for selected sectors. While uncertainties persist, especially surrounding the long-term durability of the agreement, local investors appear to be cautiously optimistic.

With continued support from local institutional players and signs of sectoral rotation into cyclical counters like construction, property, and E&E, the FBM KLCI is likely to trade within the 1,520–1,530 range in the near term.

This article is for informational purposes only and does not constitute investment advice.