[WORLD] CIMB Securities Sdn Bhd has described the recent US-China agreement to temporarily lower tariffs as broadly beneficial for Malaysia’s equity market, citing reduced recession risks both domestically and globally, alongside stronger net foreign inflows.
The move comes as both economic giants grapple with inflationary pressures and ongoing supply chain disruptions. Analysts believe the tariff rollback could offer critical relief for businesses dependent on international trade—particularly within manufacturing and technology sectors. However, there are concerns that the 90-day period may be insufficient to fully counteract the prolonged impact of the trade war.
"We are maintaining our KLCI target at 1,657 points, with a review planned after the first quarter of 2025 earnings season," CIMB Securities noted in a research briefing.
The brokerage said it continues to favour domestic-oriented companies with reliable dividend yields, identifying sectors such as banking, telecommunications, utilities, construction, and healthcare as more resilient to trade-related volatility.
Malaysian banks stand to gain from the tariff reprieve, given their strong liquidity and exposure to the domestic economy. Public Bank, RHB Bank, and Alliance Bank Malaysia (ABMB) have been named as top picks in the financial sector.
CIMB pointed to the sector’s underlying strength, underpinned by Malaysia’s stable GDP growth, contained inflation, and steady interest rate outlook. These conditions, it said, position banks to benefit from increased corporate and consumer lending activity as global trade conditions improve.
The plantation sector may also benefit from an uptick in global demand for edible oils and higher crude oil prices amid an improving economic landscape, with IOI Corporation identified as its preferred pick.
Meanwhile, easing trade tensions could spur global semiconductor demand, bolstering Malaysian tech firms that already enjoy competitive advantages. The US’s temporary tariff reduction on Chinese goods—still higher than rates on Malaysian exports—positions Malaysia favourably.
The country’s role in the global semiconductor supply chain continues to attract foreign direct investment, particularly from firms seeking to diversify production beyond China. Malaysia’s established infrastructure and skilled workforce in hubs like Penang and Kulim enhance its appeal as a key regional player.
CIMB also noted that local glove manufacturers remain cost-competitive, with Malaysian imports facing a 10 per cent tariff in the US—well below the 30 per cent levied on Chinese counterparts. Inari Amertron and MPI Tech have been named as top technology sector picks, while Kossan and Supermax lead among glove manufacturers.
CIMB has removed SD Guthrie from its top picks following a recent downgrade, updating its preferred stocks to include CelcomDigi, Gamuda, Public Bank, Farm Fresh, RHB Bank, Tenaga Nasional, IHH Healthcare, and 99 SpeedMart.
The tariff truce, agreed upon in Geneva over the past weekend, entails the US lowering additional duties on Chinese imports from 145 per cent to 30 per cent, while China will reduce tariffs on US goods from 125 per cent to 10 per cent. In addition, China has agreed to cancel or suspend certain non-tariff barriers previously enacted against US products.
Although the agreement marks a significant de-escalation in US-China trade tensions, experts caution that deeper issues—such as disputes over intellectual property and technology transfers—remain unresolved. Analysts suggest that sustained improvement in bilateral relations will depend on further diplomatic progress beyond the temporary tariff relief.
WhatsApp
Instagram
Threads
