[MALAYSIA] Bursa Malaysia, the stock exchange of Malaysia, made a significant rebound on February 26, 2025, after a weak start in the morning session. The Malaysian stock market had opened lower, following a broader decline in global markets, largely due to rising concerns over the economic impact of President Donald Trump's trade tariffs. However, the local bourse quickly recovered, boosted by a wave of bargain hunting and positive investor sentiment.
The trading day began with uncertainty as the FTSE Bursa Malaysia KLCI (FBM KLCI) index dropped by 1.76 points, opening at 1,566.27. This early decline was reflective of global market trends, with concerns mounting over the impact of US trade tariffs on the broader economy. Wall Street, which had shown a mixed performance the previous day, continued to face challenges as traders grew increasingly worried about weakening consumer confidence. According to Rakuten Trade, these global uncertainties were expected to exert downward pressure on domestic markets.
Despite the bleak outlook, the Malaysian market showed resilience. As of 9:25 AM, the FBM KLCI had gained 6.97 points, climbing to 1,575, demonstrating the market's ability to recover quickly from a weak start.
Factors Behind the Rebound
Several factors contributed to the rebound of Bursa Malaysia. One of the primary drivers was the wave of bargain hunting that took place shortly after the initial drop. Investors took advantage of lower stock prices to accumulate shares, especially in the context of what was seen as a temporary setback rather than a long-term downtrend.
Rakuten Trade noted that the "recent foreign sell-down has been unrelenting," but it also pointed out that this could present an opportunity for investors to purchase shares at attractive prices. The local market was trading at a reasonable 14.5x CY25 price-to-earnings ratio, which further bolstered the belief that foreign buyers might return to the market soon. Despite the challenges, Rakuten maintained an optimistic outlook, stating that the "index is expected to trend within the 1,565-1,575 range," reflecting the cautious optimism that investors were feeling.
Mixed Performances in the Early Trading Session
In the early stages of trading, some stocks on Bursa Malaysia saw a decline. Kuala Lumpur Kepong, a prominent plantation company, lost 22 sen to RM20.90. Similarly, QL Resources saw a drop of 5 sen to RM4.66, and CelcomDigi, a telecommunications company, fell by 4 sen to RM3.42. However, not all stocks performed negatively. PETRONAS Dagangan, the subsidiary of the national oil company, gained 22 sen, rising to RM21.20. Telekom Malaysia also saw positive movement, climbing 17 sen to RM6.87. Additionally, Padini, a well-known fashion retailer, rose 11 sen to RM1.72 following the release of its earnings report.
What Lies Ahead for Bursa Malaysia?
The rebound of Bursa Malaysia after a shaky start highlights the market's inherent volatility and resilience. Investors are cautiously optimistic that the market will continue to recover in the coming days, especially if global market conditions stabilize. The presence of strong local companies like PETRONAS Dagangan and Telekom Malaysia, which are seen as pillars of the economy, provides support for the market’s overall stability.
However, concerns over global economic factors such as trade tariffs and inflation persist. As mentioned by Rakuten Trade, while there is hope that foreign buyers will return soon, there remains a level of uncertainty regarding the broader economic environment. This calls for vigilance among investors as they navigate the complexities of both domestic and international markets.
Bursa Malaysia's ability to rebound after a weak start on February 26, 2025, serves as a testament to the resilience of the Malaysian stock market. Despite global challenges, including fears of trade tariff impacts and weaker consumer confidence in the US, the local market has shown that it can recover quickly through bargain hunting and investor optimism. As the market continues to navigate these turbulent times, investors should remain vigilant but also consider the potential for future growth, particularly with valuations that suggest opportunities for long-term investments.
In the words of Rakuten Trade: "At current levels, the local bourse is trading at a reasonable 14.5x CY25 PER, and we still hold the view that foreign buyers may return anytime soon." With this in mind, investors may find opportunities in the current market conditions, balancing caution with strategic buying.
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