Positive Outlook for Local Equities as US-China Tariff Truce Eases Global Concerns

KUALA LUMPUR: The recent agreement between the United States and China to temporarily reduce tariffs is seen as a positive development for the Malaysian equity market. Analysts suggest the move lowers the risk of a potential recession in the US and globally, while also encouraging stronger foreign investment inflows into the local market.

The benchmark index target remains unchanged for now, with a possible revision anticipated following the release of corporate earnings in the first quarter of 2025.

Market experts are favoring domestically focused companies, particularly those offering consistent dividend yields, across sectors such as banking, telecommunications, utilities, construction, and healthcare. These industries are expected to provide resilience against external trade-related uncertainties.

Local Equities

The banking sector is projected to benefit due to its close ties with the domestic economy and strong liquidity positions. Meanwhile, the plantation industry could gain from improved global demand for edible oils and higher crude oil prices, should the broader economy continue to strengthen.

In the technology space, easing trade tensions may boost global semiconductor demand, with local players maintaining a competitive edge as US tariffs on their goods remain lower than those on Chinese imports. Additionally, Malaysian glove manufacturers are expected to retain a cost advantage due to relatively lower tariff rates, further supporting export potential in the healthcare segment.

Overall, the temporary tariff reduction is being viewed as a timely boost for investor sentiment and economic momentum.

Business News

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