KUALA LUMPUR, June 24, 2025 – The FTSE Bursa Malaysia KLCI (FBM KLCI) closed lower on Tuesday. It shed 2.32 points, or 0.15%, to 1,514.29. This dip notably bucked broader regional gains. Furthermore, it comes amidst cautious investor sentiment. The market’s movement is heavily influenced by ongoing geopolitical developments in the Middle East and a noticeable rotation into mid-cap stocks.
Market Movers and Shakers
While the benchmark index experienced a slight decline, the broader market presented a mixed picture. Gainers outnumbered losers significantly, with 634 gainers against 346 losers. Trading volume was robust, totaling 2.53 billion shares valued at RM2.04 billion.
Top 10 Movers (FBM KLCI): Based on the provided market summary, several stocks made notable upward movements:
- Petronas Dagangan Bhd: Up 2.05%, reflecting a one-day change of 68 sen.
- Sime Darby Bhd: Increased by 2.48%, with a one-day change of 5 sen.
- Hong Leong Financial Group Bhd: Gained 0.20%, showing a one-day change of 28 sen.
- Malaysian Pacific Industries Bhd: Rose by 1.34%, marking a one-day change of 28 sen.
- Axiata Group Bhd: Climbed 1.45%, with a one-day change of 5 sen.
Top 10 Losers (FBM KLCI): Conversely, some heavyweights experienced a decline:
- Nestle (M) Bhd: Down 1.48%, representing a one-day change of 56 sen.
- Heineken Malaysia Bhd: Decreased by 1.25%, with a one-day change of 32 sen.
- Bintulu Port Holdings Bhd: Fell 4.60%, showing a one-day change of 26 sen.
- IHH Healthcare Bhd: Declined 3.80%, with a one-day change of 26 sen.
Top Active Stocks (by Volume): Mid-cap and small-cap counters demonstrated significant activity, suggesting a shift in investor focus:
- Tanco Holdings Bhd: Traded 499 million shares, closing up 2 sen.
- MYEG Services Bhd: Saw 42.7 million shares traded, ending up 2 sen.
- Nexgram Holdings Bhd: Traded 41.2 million shares, gaining 0.5 sen.
This rotation suggests that investors are actively seeking value and growth opportunities. They are looking outside the traditionally dominant blue-chip segment, possibly due to prevailing uncertainties in the broader market.
Impact of Global and Malaysian Policies
Geopolitical Landscape: Iran-Israel Conflict The ongoing conflict between Iran and Israel continues to cast a shadow over global markets. U.S. President Donald Trump announced a ceasefire, which brought temporary relief. This also strengthened the Ringgit against the US dollar. However, Tehran has not issued an official response. This uncertainty keeps investors on edge.
The conflict has already led to volatility in oil prices. Brent crude, which saw significant gains earlier, fell following the ceasefire news. Nevertheless, the risk of a sustained blockade of the Strait of Hormuz remains a concern. This crucial global oil transit point could significantly impact oil prices and equity markets if it materializes. Furthermore, Malaysian flights have been impacted by airspace closures in the Middle East.
Malaysian Economic Policy: Key Reforms and Agreements Several domestic policy changes are coming into effect, which could influence the market:
- Service Tax on International Private Education: Starting July 1, 2025, Malaysia will impose a 6% service tax on private education services for international students. While this aims at revenue generation, it could impact Malaysia’s appeal as a study destination.
- Subsidy Rationalisation and Broader SST: Economists expect Malaysia’s inflation to remain benign for the rest of 2025. This is true despite upcoming subsidy reforms and a broader sales and service tax (SST) implementation. The impact is anticipated to be gradual and contained. For example, electricity tariff reforms start in July. However, the RON95 fuel subsidy rationalization mechanism, due in 2H2025, certainly bears watching.
- Malaysia-EFTA Economic Partnership Agreement (MEEPA): This agreement was signed on June 23, 2025. It involves Switzerland, Norway, Iceland, and Liechtenstein. Significantly, it marks Malaysia’s 18th Free Trade Agreement. The agreement aims to boost job creation, skills development, and business growth, particularly for SMEs. It also seeks to enhance professional mobility for Malaysians in EFTA markets. This long-term initiative could positively impact various sectors, especially E&E, optical and scientific instruments, and metal products.
Global Policy and Market Outlook Globally, regulatory divergence adds complexity for global firms. This is particularly noticeable in ESG and climate risk regulations between the US and EU. The Federal Reserve’s commitment to maximum employment, stable prices, and moderate long-term interest rates continues to guide monetary policy. Discussions around interest rate trajectories remain a key focus for investors worldwide. Overall sentiment points towards continued uncertainty in the short term. Nonetheless, there is potential for a recovery in market liquidity after 2026. This recovery would likely be driven by deregulation and productivity growth.
Outlook for KLCI.net Blog
The KLCI’s performance on June 24, 2025, clearly reflects a nuanced market. It is responding to both domestic policy shifts and significant international events. Geopolitical tensions in the Middle East create immediate volatility. However, the long-term impact of Malaysia’s new trade agreements and fiscal adjustments will be crucial. Investors are actively seeking opportunities in mid-cap segments, suggesting a discerning approach in the current environment. Therefore, keeping a close eye on global oil prices and further developments in the Iran-Israel situation, alongside the rollout of domestic policies, will be key for the KLCI’s trajectory.