FBM KLCI rises amid regional market gains

[MALAYSIA] The FTSE Bursa Malaysia KLCI (FBM KLCI) advanced 17.68 points, or 1.2%, to close at 1,535.73 on Thursday, March 28, 2025, mirroring gains across major Asian markets. This uptick occurred despite the recent announcement by U.S. President Donald Trump of a 25% tariff on imported vehicles and auto parts.

Regional Market Performance

The positive sentiment was widespread in the region. Singapore's Straits Times Index increased by 15.50 points to 3,979.21, marking a 0.39% rise. Similarly, Hong Kong's Hang Seng and China's Shanghai Composite Index closed higher. Conversely, Japan's Nikkei 225 and Thailand's SET Index experienced declines. ​

Investor Sentiment Amid Tariff Announcements

Despite the U.S. tariff announcement, Asian markets displayed resilience. Nixon Wong, Chief Investment Officer at Tradeview Capital Sdn Bhd, noted that investors might be adopting a wait-and-see approach, anticipating further details on U.S. trade policies expected on April 2. He suggested that such announcements are less likely to cause significant market disruptions, especially as global markets have been in a risk-off mode since the start of the year.

Vincent Lau, Head of Equity Sales at Rakuten Trade, highlighted that Malaysia's limited exposure to the U.S. automotive market—given that Malaysia does not export cars or auto parts to the U.S.—contributed to the local market's positive reaction. He emphasized that Malaysia's automotive demand is primarily domestically driven.

Potential Implications for Malaysia's Automotive Sector

The broader concern remains whether affected countries, notably China, might redirect excess vehicle supply to markets like Malaysia. Wong believes the impact would be limited due to the just-in-time manufacturing model prevalent in the automotive industry, which maintains low inventory levels. He added that while manufacturers might need to divert and clear a portion of their inventory, leading to potential short-term price reductions, the situation is expected to normalize once excess stock is cleared. ​

Market Outlook

Analysts suggest that the recent market movements reflect a complex interplay of global trade policies and regional economic resilience. While the U.S. tariffs introduce uncertainties, the measured response of Asian markets indicates a cautious optimism among investors. Continued monitoring of policy developments and market reactions will be essential in navigating the evolving economic landscape.