Kuala Lumpur, June 10, 2025 – The FTSE Bursa Malaysia KLCI (FBM KLCI) ended marginally lower today. It shed 0.16% or 2.46 points, closing at 1,516.95. The benchmark index reversed earlier gains during the final hour of trading. This decline was largely due to cautious investor positioning ahead of ongoing US-China trade negotiations. Continuous foreign outflows also contributed to the dip. This marks the 15th consecutive day of net foreign selling, though signs of moderation were visible.
Despite the broader index’s fall, sectoral leadership remained consistent. Consumer, telecommunications, and plantation counters showed relative strength. Local institutional flows offered some support. However, they were not enough to fully offset profit-taking.
Movers and Shakers
Based on the provided data and recent news:
Top FBM KLCI Movers:
- 99 Speed Mart Retail Holdings Bhd: Gained 2.42% (RM0.05) to RM2.12. (News reports also highlighted this gain).
- Mr DIY Group (M) Bhd: Increased by 1.52% (RM0.03) to RM1.99.
- Axiata Group Bhd: Rose by 2.08% (RM0.04) to RM1.96.
- Telekom Malaysia Bhd: Saw a gain of 1.04% (RM0.07) to RM6.80.
- Press Metal Aluminium Holdings Bhd: Climbed by 1.73% (RM0.08) to RM4.70.
Top FBM KLCI Laggards:
- Nestle (M) Bhd: Led the declines, sliding 0.98% (RM0.74) to RM75.00.
- Ayer Holdings Bhd: Trimmed 4.28% (RM0.40) to RM8.95. (News reports also listed this as a top loser).
- Allianz Malaysia Bhd: Erased 1.48% (RM0.28) to RM18.66.
- Dutch Lady Milk Industries Bhd: Dipped 0.67% (RM0.20) to RM29.50. (This was also noted in news reports as a top loser).
- Hong Leong Bank Bhd: Shed 0.91% (RM0.18) to RM19.52.
Most Active Stocks (by Volume):
- MYEG Services Bhd: 77.3 million units traded, up 0.53% (RM0.005) to RM0.95.
- NexG: 45.4 million units traded, eased 2.70% (RM0.01) to RM0.36.
- Tanco Holdings Bhd: 44.9 million units traded, down 2.52% (RM0.025) to RM0.965.
- Paradigm Real Estate Investment Trust: 44.6 million units traded, unchanged at RM1.00.
- Harvest Miracle Capital Bhd: 41.6 million units traded, unchanged at RM0.18.
Key Sector Performance:
- FBM70 Index: Surged 0.47% (77.35 points) to 16,486.66. This shows strength in mid-cap stocks.
- Energy Index: Climbed 2.45 points to 723.31.
- Financial Services Index: Slid 37.89 points to 17,694.30.
- Plantation Index: Shed 38.80 points to 7,210.03.
Policy Changes Impacting KLCI
Malaysia’s Sales and Service Tax (SST) Expansion
A notable domestic policy change will impact various industries and potentially corporate earnings. Malaysia’s Sales and Service Tax (SST) scope is expanding, effective July 1, 2025. This revision, announced in Budget 2025, aims to strengthen the country’s fiscal position.
- Sales Tax: Rates remain at 0%, 5%, and 10%. However, more goods will now be taxed at 5% or 10%. Essential goods largely remain exempt.
- Service Tax: The scope broadens to include new categories. These include financial services (fees/commissions) and private healthcare (excluding Malaysian citizens). Rental/leasing services, construction services (excluding residential), education services (higher education and private, excluding Malaysian citizens), and wellness/beauty services are also now covered.
- Impact: Businesses previously outside the SST net may now need to register and comply. This could increase operating costs. The government has deferred penalties for non-compliance until December 31, 2025. This allows time for adaptation. The overall impact on KLCI-listed companies could be mixed. Some may face higher costs, while others in newly taxed sectors might see revenue shifts. Consumer and residential construction sectors are expected to be less impacted by certain SST changes.
Malaysia’s Economic Fundamentals and Outlook
Malaysia’s GDP grew by 4.4% in Q1 2025. This was driven by steady domestic demand. Sustained household spending, supported by minimum wage and civil servant salary revisions, also helped. Investment activities remained robust. While export growth slowed due to lower mining exports, stronger E&E exports and tourism provided offsets.
The government continues its commitment to reforms under the Ekonomi MADANI framework. It focuses on fiscal sustainability and attracting high-quality foreign direct investment. Nonetheless, Maybank IB has adjusted its year-end KLCI target to 1,660 points (from 1,700). This is due to disappointing Q1 2025 corporate earnings, particularly in banking and oil and gas sectors. Maybank IB advises a defensive approach, favoring domestic-driven sectors. These include consumer, construction, healthcare, renewable energy, and REITs.
Global Policy Changes and Their Impact
- US-China Trade Negotiations: Ongoing trade talks between the US and China are a key global factor. They significantly influence market sentiment. Initial commentary has been constructive. Still, market participants are adopting a “wait-and-see” approach. Uncertainty over tariff relief is tempering risk appetite. Prolonged uncertainties could increase downside risks to growth. They may also heighten market volatility.
- Global Economic Outlook: The OECD’s latest Economic Outlook projects a slowdown in global growth. It expects growth to fall from 3.3% in 2024 to 2.9% in both 2025 and 2026. This is primarily due to substantial barriers to trade. Tighter financial conditions, diminishing confidence, and heightened policy uncertainty also play a role. The return of “America First” trade policy under President Trump, with reciprocal tariffs, has already dampened investor and corporate sentiment. This contributed to a 7.8% Q-o-Q loss for global stock indices, including the FBM KLCI, in Q1 2025.
- Monetary Policy: Central banks are expected to remain vigilant. If inflation expectations stay anchored and trade tensions do not worsen, policy rate reductions could continue. This applies to economies where inflation moderates and demand is subdued. Such actions could provide some tailwind to regional equity markets, including the KLCI.
Conclusion
Today’s trading session saw the KLCI fall in a late sell-off. Global trade uncertainties and persistent foreign outflows weighed on sentiment. While major stocks like Nestle and Dutch Lady declined, the broader FBM70 index showed resilience. This highlights the strength of mid-cap stocks.
Looking ahead, the impending expansion of Malaysia’s SST in July is a significant domestic factor. It could reshape operational costs and revenue for various sectors. Globally, the outcome of the US-China trade negotiations remains crucial. Any escalation or de-escalation will directly influence market sentiment and global supply chains. Investors are advised to remain cautious. Focus on defensive plays and domestic-driven sectors. These are expected to show signs of recovery in the latter half of 2025.