Malaysia-China investment optimism cushions Bursa decline

[MALAYSIA] Bursa Malaysia opened slightly lower on Thursday, defying a tech-led downturn on Wall Street as optimism surrounding fresh Malaysia-China cooperation helped to support investor sentiment.

At the opening bell, the benchmark FBM KLCI edged down 1.75 points to 1,475.17. Market sentiment was buoyed by Chinese President Xi Jinping’s visit to Malaysia, which saw the signing of new investment agreements warmly received by the local investment community.

"Both countries exchanged 31 memoranda of understanding and documents spanning various sectors, which could lift investor sentiment in the local market," said Malacca Securities Research in a note.

The firm added that industries such as tourism, plantations, technology, and construction stand to gain from the newly inked collaborations.

Xi’s visit, his first to Malaysia in nearly a decade, marks the 50th anniversary of diplomatic ties between the two nations. The trip is part of a broader regional tour aimed at strengthening economic and strategic partnerships within Southeast Asia. Malaysia remains a key player in China’s Belt and Road Initiative (BRI), and analysts say the latest agreements could deepen long-term connectivity and infrastructure cooperation.

In recent months, Malaysia has stepped up efforts to position itself as a regional hub for Chinese businesses looking to diversify operations amid growing geopolitical uncertainty. The new memoranda signed cover a wide range of sectors including green energy, digital economy, logistics, and smart manufacturing — all of which align with Malaysia’s ongoing industrial transformation efforts under the Madani Economy framework.

Nonetheless, broader concerns over escalating US-China trade tensions continued to cast a shadow on the global economic landscape.

Rakuten Trade highlighted that the FBM KLCI ended Wednesday near the 1,475 mark, as buying interest remained subdued amid weak performances across the region.

"With investors increasingly turning risk-averse and seeking refuge in gold, we expect the index to trend within the 1,470-1,480 range today," the brokerage said in its market commentary.

Adding to global uncertainty, recent U.S. economic data showing hotter-than-expected inflation has reignited fears of prolonged interest rate hikes by the Federal Reserve. This has weighed on emerging market equities, including Malaysia’s, as investors anticipate tighter global financial conditions.

Despite these headwinds, local analysts remain cautiously optimistic. “The influx of foreign direct investments linked to China may offer some buffer against external volatility,” said a Kuala Lumpur-based fund manager. “If follow-through developments materialize from these MOUs, we could see selective sectoral rallies, particularly in infrastructure and logistics plays.”

In early trade, notable decliners included Fraser & Neave Holdings, down 80 sen to RM25.00, Nestle Malaysia, which shed 64 sen to RM76.40, and Malaysian Pacific Industries, slipping 18 sen to RM14.70.

On the gainers’ list, Kein Hing surged nine sen to RM1.29, Paragon Globe climbed seven sen to RM2.07, and Petron Malaysia advanced five sen to RM3.27.

Among the most actively traded stocks, Revenue Group was unchanged at 9.5 sen, Kinergy Advancement remained flat at 32.5 sen, while Aumas rose 2.5 sen to 78.5 sen.