Malaysian Market Review: The FBMKLCI declined 0.62% on Thursday, in line with regional markets, as escalating Middle East tensions weighed on sentiment after US President Donald Trump signalled potential intensified strikes on Iran. Market breadth was negative, with 489 advancers versus 716 decliners. Sector-wise, Healthcare (+2.57%), Energy (+1.81%) and Plantation (+1.38%) led gains, while Finance (-1.58%), Technology (-1.57%) and Consumer (- 1.24%) were the main laggards.
Global Markets. US equities ended mixed on Thursday, with the Dow (-0.13%), S&P 500 (+0.11%) and Nasdaq (+0.18%) rebounding from sharp intraday losses after risk sentiment improved. Earlier in the session, markets traded lower following signals from US President Donald Trump that the Iran conflict could persist for weeks; however, sentiment turned after IRNA reported that Iran and Oman are drafting a protocol to manage traffic through the Strait of Hormuz (CNBC). In Europe, the STOXX Europe 600 (-0.18%) closed lower as renewed concerns over potential escalation in the US–Iran conflict weighed on global risk appetite (CNBC). Asian markets followed suit, reversing earlier gains, led by Japan’s Nikkei 225 (-2.38%), Hong Kong’s Hang Seng (-0.70%) and China’s Shanghai Composite (-0.74%), as Trump’s latest televised address unsettled investor sentiment (CNBC).
Market Outlook. Global conditions remain fragile as escalating Middle East tensions and rising US protectionism weigh on sentiment. Brent oil prices remain elevated at c.US$109/bbl amid uncertainty over the Strait of Hormuz, after US President Donald Trump signalled continued strikes on Iran over the next two to three weeks with no clear path to de-escalation, although prices eased slightly following reports from Iranian state news agency IRNA that Iran is working with Oman to draft a protocol to “monitor transit” through the key waterway. The US has also introduced sweeping tariff measures, including up to 100% on patented drugs, alongside a 20% levy on firms committing to onshoring that rises to 100% over four years, subject to compliance conditions, exemptions, and a January 2029 deadline. Larger drugmakers have 120 days before implementation, versus 180 days for smaller firms, while preferential rates apply to key partners, including 15% for the EU, Japan, Korea and Switzerland, and 10% for the UK. Metals tariffs remain at 50% on raw material made from steel, aluminium and copper but are now applied on full import prices, while finished goods with over 15% of those materials content face a 25% tariff on total value. Against this backdrop, the Malaysian market is likely to stay cautious, with energy supported by firm oil prices, while export-oriented and manufacturing sectors face headwinds from weaker demand and rising cost pressures.
Sector focus. We favour the energy sector amid Middle East tensions, with upstream oil & gas benefiting from higher crude prices, supporting near-term earnings. Plantations may see indirect support from firmer biofuel demand, while defensive utilities remain attractive as investors seek stability amid heightened volatility.
FBMKLCI Technical Outlook
Technical Commentary: The FBM KLCI has rebounded back into its prevailing uptrend channel, suggesting that the broader bullish structure remains intact despite recent volatility. This indicates that the recent weakness was likely a healthy consolidation within the ongoing uptrend. Key support is seen at 1,695, with a break below this level potentially reigniting selling pressure.
Company News
Bintai Kinden Corp Bhd, which lost Tenaga contracts in 2023 after entering PN17 status, has secured its first post-recovery Tenaga deal — a RM44.65m electrical project in Bukit Tengah, Penang. (The Edge)
Chin Hin Group Property Bhd has withdrawn its bid for a six-month extension to complete a RM105 million private placement, a day after filing the request. (The Edge)
Dialog Group Bhd will hold a 25% stake in the Cendramas field PSC off Peninsular Malaysia, commencing Sept 23 for 20 years. (The Edge)
DKSH Holdings (Malaysia) Bhd’s privatisation has fallen through after minority shareholders rejected the buyout offer at Thursday’s EGM. (The Edge)
MN Holdings Bhd has secured a RM128 million contract to build a 275kV consumer landing station for a data centre in Peninsular Malaysia. (The Edge)
NexG Bhd has appointed Datuk Ramli Din, 64, and Mohamad Tirmizi Ishak, 30, as non-executive directors, a day after two board resignations. (The Edge)
Sunway Bhd founder Tan Sri Jeffrey Cheah Fook Ling has called on the shareholders of IJM Corp Bhd — particularly government-linked investment funds — to evaluate Sunway's takeover bid objectively, and not be influenced by race-based attacks against the deal made by certain quarters on social media. Meanwhile, the Malaysian Anti-Corruption Commission has submitted investigation papers on the takeover bid to the Attorney General’s Chambers for further action. (The Edge)
Tenaga Nasional Bhd is partnering with the Perak government under its Hydro Life Extension Programme (HLEP) to refurbish major hydro stations along the Temengor-Bersia-Kenering corridor at a cost of RM5.8 billion. The initiative, led by partnership with consortium of Voith Hydro and HeiTech Padu Bhd, will boost generation capacity to 650.75MW, enhancing efficiency and reinforcing Perak’s clean energy role. (The Edge)
UEM Group Bhd is set to privatise UEM Edgenta Bhd after shareholders approved a selective capital reduction at Thursday’s EGM, with 97.09% voting in favour and only 1.33% against. (The Edge)
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| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 4.025232 | 4.057517 |
| EUR | 4.652922 | 4.662453 |
| CNY | 0.585439 | 0.586057 |
| HKD | 0.513407 | 0.517569 |
| SGD | 3.127135 | 3.152540 |