Trade Performance and Fund Flow Week Ended 17 January
- Emerging markets rebounded from their previous losses last week, with seven out of ten major stock exchanges closing the week out on a favourable note, while the MSCI Emerging Markets (EM) gained 1.2% week-on-week (WoW). Global market celebrated a slew of positive news during the week, starting with easing trade tensions as the incoming Trump administration’s economic advisers considered a gradual and pragmatic approach to tariff hikes. Towards the end of the week, upbeat economic data and earnings from the US provided the impetus to shrug off jitters ahead of the US presidential inauguration.
- Nevertheless, foreign investors continued to exercise caution and rotated out from all the Asian countries observed, except Indonesia.
- China’s stock markets reverted to a net gain position last week, following the easing of external trade tensions coupled with a stronger-than expected economic growth in December. China’s GDP expanded by 5.4% year-on-year (YoY) in the fourth quarter of 2024. The higher-than-expected growth was driven by higher export value alongside support from its recent stimulus measures. Both the SHCOMP and SZCOMP closed 2.3% and 4.3% higher, respectively.
- The FBMKLCI closed in the red for four out of five trading days. The cautious performance was largely caused by concerns over the US Biden administration’s proposed three-tiered export restrictions on artificial intelligence (AI) chips. As a Tier 2 country, Malaysia would face limitations, including importing only 50,000 graphics processing units (GPU) over two years, and restricting data centre operators to deploying a maximum of 7% of their computing capacity. These restrictions could impact the country’s AI growth, particularly in the data centre and semiconductor industries, potentially slowing innovation and foreign investment in these sectors.
- Overall market capitalisation extended its net loss, closing 2.3% lower at RM1,988.48 bil, weighed down by a broad-based market contraction. The Energy sector was the only sector to record growth.