The Malaysian stock market came under selling pressure on Thursday, April 2, following the risk-off sentiment globally after US President Donald Trump‘s comments on the Middle East war and after the work-from-home mandate for employees of government ministries, agencies and state-owned companies.
The FTSE Bursa Malaysia KLCI tanked 1.17% to the day’s low of 1,688.89 today. At the time of writing this report, the index was last down 0.62% at 1,698.
WFH for Malaysian government employees
In a bid to bring down energy costs amid soaring fuel prices due to the conflict in the Middle East, Prime Minister Anwar Ibrahim announced work-from-home for government workers from April 15.
“The aim is to reduce fuel consumption and ensure the sustainability of energy supply,” Anwar said in a statement late Wednesday, suggested a Reuters report. Further details on the policy will be announced later by the government.
Anwar also added that the efforts by state oil firm Petronas and others were underway to secure fuel and power supplies. Malaysia is spending nearly $1 billion a month on subsidy measures to keep retail pump prices low, according to the report.
Trump dashes hopes of US-Iran war de-escalation
Furthermore, Asian markets, including those in Malaysia, also faced selling pressure after Trump dashed optimism that the war in the Middle East was nearing a swift resolution. Investors expect disruptions to crude and gas flows, which are expected to weigh on global growth.
Amid the selloff in the world markets in the last one month, Malaysian stocks have remained largely better off. Data shows that the FTSE Bursa Malaysia KLCI index has lost only 1.53% last month amid the Middle East crisis, while other Asian markets from Japan to India are down 4-12% during the same period.
According to a Bloomberg report, political stability and its status as one of Asia’s few net energy exporters have cushioned the Malaysian stock market amid the US-Israeli war with Iran.
“It’s where you go when things are going badly elsewhere,” said Alexander Redman, chief equity strategist at CLSA in Singapore, who upgraded the market to neutral from underweight for as long as the war in Iran persists, the report noted.
“Malaysia’s in a relatively good position because it runs a current account surplus, is a net exporter of oil and gas, and the proportion of energy in Malaysia’s CPI basket is not as high as others,” CLSA analysts were quoted as saying by Bloomberg.
(With input from agencies)
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