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Markets Wobble on US Fed Uncertainty
Wed, 27-Aug-2025 07:48 am
by Research Team • Apex Research

Malaysia Market Review: The FBM KLCI fell 1.3% on Tuesday, as accelerating profit-taking following recent strong gains weighed on sentiment, in tandem with regional weakness. Lower liners also retreated in line with the broader market. Market breadth was negative, with decliners outpacing advancers 629 to 413. Sector performance was broadly weaker, led by Utilities (-1.3%), Finance (-1.2%), and Consumer (-1.1%), while Energy (+0.2%) was the sole gainer.

 

Global Markets Review: Wall Street closed higher on Tuesday with the S&P 500 (+0.4%), Nasdaq (+0.4%), and Dow (+0.3%) advancing as markets looked past President Trump’s bid to remove Federal Reserve Governor Lisa Cook. While the move sparked concerns over Fed independence, pushing long-term Treasury yields higher and weakening the dollar index, equities held firm. In Europe, equities slipped, dragged down by losses in France amid rising fears that the country’s minority government could be ousted next month. Asian markets closed lower with Nikkei 225 (-1%), Hang Seng (-1.2%), and Shanghai Composite (-0.4%) declining, as investors weighed US President Donald Trump’s escalatory rhetoric on tariffs alongside Fed controversy.  

 

Market Outlook. Trump’s move against Governor Cook has heightened concerns over monetary policy independence, adding to short-term volatility in Malaysia’s FBM KLCI. Attention now shifts to Nvidia’s earnings on Wednesday (after US close), a key barometer of AI-driven growth and semiconductor demand, and to Friday’s US PCE inflation print, which will provide further insight into the Fed’s policy stance. Domestically, policy visibility has improved following last month’s unveiling of the 13th Malaysia Plan, with further fiscal measures anticipated in Budget 2026 (October). Meanwhile, the ringgit is expected to strengthen against the USD on broad dollar weakness, which could weigh on export-driven sectors, reinforcing the case for investors to rotate towards defensive, domestic-oriented plays. Overall, we expect the market to consolidate with a negative bias ahead of key US earnings and economic data releases.

 

Sector focus. We remain constructive on selective domestic construction, power ancillary and renewable energy counters, supported by structural tailwinds from accelerating data centre expansion and the ongoing energy transition. These secular themes should demonstrate resilience against prevailing global trade headwinds.

 

Technical Commentary: The FBM KLCI formed a bearish marubozu candle to close above SMA50 level yesterday. However, indicators remained positive, with the MACD Line ending the day above the Signal Line, while the RSI floated above 50. Immediate resistance is located at 1,640. Support is envisaged at around 1,576.

 

Company News (source: various)

AirAsia X Bhd’s net profit for 2QFY2025 rose to RM35.22 million from RM4.82 million in 2QFY2024 thanks to lower fuel costs and the weaker US dollar, even as revenue fell to its lowest in nearly two years amid the seasonally lean travel period. 

 

Berjaya Land Bhd’s net loss for 4QFY2025 shrank y-o-y to RM15.43 million from RM79.91 million in 4QFY2024, helped by a RM38.33 million court-awarded compensation linked to the Selangor Turf Club project. 

 

Hartalega Holdings Bhd said it has secured the court’s permission to commence a judicial review of additional tax bills totalling more than RM100 million issued by the Inland Revenue Board. 

 

IGB Bhd’s net profit for 2QFY2025 edged up a marginal 0.2% to RM75.33 million from RM75.18 million in 2QFY2024 despite higher revenue, weighed down by higher taxation. 

 

IOI Properties Group Bhd confirmed that it is planning a real estate investment trust to be listed on Bursa Malaysia's Main Market, as it announced the incorporation of a subsidiary, IOIPG REIT Management Sdn Bhd, to be the REIT's manager. 

 

Jati Tinggi Group Bhd’s wholly-owned unit Jati Tinggi Holding Sdn Bhd has bagged a RM46.7 million subcontract work for the installation, testing and commissioning of 11 kilovolt underground cables and accessories.

 

Leong Hup International Bhd’s net profit for 2QFY2025 dropped 6.4% y-o-y to RM90.29 million from RM96.50 million, due to a decline in its Indonesian operations.

 

Malayan Banking Bhd’s net profit for 2QFY2025 rose nearly 4% y-o-y to RM2.63 billion from RM2.53 billion, as higher income offset rising provisions for bad debts

 

MBSB Bhd’s net profit for 2QFY2025 jumped 74.3% y-o-y to RM95.56 million from RM54.83 million on a 41.5% decline in expected credit losses on loans, financing and advances, and other impairment.

 

OCK Group Bhd said it intends to list its 52%-owned energy solutions unit, EI Power Technologies Sdn Bhd (EIPT), on the ACE Market of Bursa Malaysia. 

 

Pharmaniaga Bhd’s net profit for 2QFY2025 rose 41.6% y-o-y to RM3.96 million from RM2.8 million, as quarterly revenue climbed 10.57% to RM926.86 million from RM838.26 million, driven by stronger demand from the government’s concession. 

 

Public Bank Bhd’s net profit for 2QFY2025 declined 1% y-o-y to RM1.76 billion from RM1.78 billion, dragged by lower non-taxable income. 

 

Supermax Corp Bhd’s net loss for 4QFY2025 shrank to RM67.04 million from RM128.52 million in 4QFY2024, as cost rationalisation efforts helped cushion the impact of declining revenue. 

 

TH Plantations Bhd announced it has terminated CEO Mohamed Zainurin Mohamed Zain’s contract. 

 

UOA Development Bhd’s net profit for 2QFY2025 surged 50% y-o-y to RM91.71 million from RM61.05 million, thanks to progressive revenue from four projects.

 

WCE Holdings Bhd is aiming to complete the West Coast Expressway by the financial year ending March 31, 2027 (FY2027). 

 

Sentiment: Negative
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