Stock Market in Malaysia Anticipated to Keep Volatility Low
In the financial world, July 9, 2025, is shaping up to be a cautious day for the Asian markets, particularly due to ongoing tariff concerns that may create some apprehension among investors. This is evident in the Kuala Lumpur Composite Index (FBMKLCI), which has been under pressure, with a year-to-date decline of about 5.94%.
Recently, the index has been trading between 1,538 to 1,549 points[2][1]. Despite this short-term softness, the longer-term outlook for Malaysia's stock market remains positive. This optimism is backed by easing global risk aversion, robust domestic liquidity, and pragmatic US trade agreements that could help alleviate some tariff-related uncertainties[1].
The FBMKLCI is currently trading at a relatively undemanding valuation (around 14.0x forward price-earnings ratio), reflecting the current market caution but also signalling potential for upside once tariff concerns subside[1]. As the year progresses, the market is expected to gradually shift into a risk-on mode as corporate capital expenditure and spending cycles pick up later in the year.
Investors are advised to consider this potential for recovery and a possible year-end rally when positioning their portfolios[1]. The medium to long-term outlook points towards a recovery in the FBMKLCI by year-end, with a target range of 1,620 to 1,666 points[1].
Meanwhile, the Malaysia stock market ticked higher on Friday, with notable gains for 99 Speed Mart Retail, which rallied 1.38 percent, and AMMB Holdings, which perked 0.19 percent. However, CIMB Group fell 0.29 percent, Axiata declined 1.27 percent, and Celcomdigi lost 0.51 percent[2].
On the global oil market, crude oil prices slumped on Friday, finishing at $66.49 per barrel for August delivery. This slump is attributed to easing geopolitical concerns in the Middle East[2]. West Texas Intermediate crude was down $0.51 or 0.76 percent on Friday[2].
In the United States, U.S. President Donald Trump has announced that his government will send letters outlining unilateral tariffs that will take effect on August 1. The EU, on the other hand, acknowledges that a comprehensive deal is unlikely to be reached by the July 9 deadline[2].
Despite these challenges, the broader outlook for Malaysia’s stock market remains constructive as global trade relations stabilize and domestic liquidity supports growth[1][2].
The industrious recovery of the Malaysian stock market, as indicated by the FBMKLCI, is expected to be driven by positive global risk aversion, robust domestic liquidity, and potential US trade agreements, with a medium to long-term outlook pointing towards a recovery by year-end, likely within the range of 1,620 to 1,666 points. In the realm of business and finance, the ongoing tariff concerns and the resulting market caution might create challenges for select companies like CIMB Group, Axiata, and Celcomdigi, but investors are encouraged to consider the potential for upside once these tariff concerns subside, particularly considering the positive industry forecast.
