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29/05/2025

Economists Cut Thai, Malaysian Growth Forecasts on Trade Turmoil

Economists have slashed forecasts for growth in Malaysia and Thailand as the export-dependent economies grapple with US President Donald Trump’s global trade war.

Thailand’s gross domestic product is set to expand 2.1% in 2025, according to the median prediction of 27 economists Bloomberg surveyed in May. That’s lower than the 2.8% expected in a February survey, and below last year’s 2.5% growth.

“We see the economy would slow down over the next few quarters since the negative impact of trade war would kick in,” Krung Thai Bank’s first vice president Chamadanai Marknual said in an emailed comment. Foreign tourists arrivals are also likely to be lower than anticipated, and there will be limited room for additional fiscal stimulus, he said.

Malaysia’s 2025 GDP is seen expanding just 4.1%, according to the median estimate of 28 economists polled. That’s down from a February forecast of 4.7% and a full percentage point slower than last year’s expansion of 5.1%. Second-quarter growth is expected to come in at 4.2%, from a prior forecast of 4.5%.

“Malaysia’s economic growth is set to moderate further over the course of 2025,” Han Teng Chua, senior economist at DBS Bank, said in an email, adding that exports will face headwinds from heightened global trade tensions.

The surveys underscore the extent to which Southeast Asia, one of the world’s fastest-growing regions, is being hit by both levies on exports to the US and the broader slowdown in global trade.

In Malaysia, domestic demand will remain resilient due to supportive household spending and sustained investment expansion, Chua said. Inflation is contained, likely providing room for Bank Negara Malaysia to loosen monetary policy in the second half of this year, the economist said.

Malaysia’s central bank said earlier this month that it has policy room to act, as it expects growth to fall below the official forecast this year.

Read More: Malaysia Sees US Reducing Proposed Tariff to 10% as Good Outcome

The Thai economy will probably post growth of 2.4% in the second quarter from a year earlier, down from the previous forecast of a 2.8% expansion.

Earlier this month, Thailand’s National Economic and Social Development Council said GDP will likely expand in a range of 1.3% to 2.3% in 2025, with growth constrained by high household and corporate debt burdens.

28/05/2025

China's premier calls for expanded trade ties with Malaysia

BEIJING, May 26 (Reuters) - China's Premier Li Qiang called for expanded trade and investment ties with Malaysia, urging the two countries to safeguard free and multilateral trade in a meeting with Prime Minister Anwar Ibrahim on Monday, Xinhua reported.

The Chinese premier is in Kuala Lumpur this week for a summit with leaders from Southeast Asian and Gulf countries, following a three-day visit to Indonesia.

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Li's meeting with Anwar also comes after Chinese President Xi Jinping toured the region last month at the height of Beijing's tariff confrontation with Washington.

Although a trade truce between the world's two largest economies was announced this month, Beijing is still seeking to consolidate ties with other economies.

"At a time when unilateralism and protectionism are on the rise and world economic growth is sluggish," Li said, China, ASEAN and GCC countries "should strengthen coordination and cooperation and jointly uphold open regionalism and true multilateralism".

China is willing to work with Malaysia to "promote closer economic cooperation among the three parties" and respond to global challenges, Li told Anwar.

The GCC is the Gulf Cooperation Council, which comprises six Arab states including major oil producers Saudi Arabia, Kuwait and Qatar. Malaysia is hosting the newly established ASEAN-GCC-China summit this week.

ASEAN is China's largest trading partner, with total trade value reaching $234 billion in the first quarter of 2025, according to Chinese customs data, while China is the GCC's top trading partner.

The GCC's total commodity trade with China reached almost $298 billion in 2023, while the bloc accounted for 36% of China's total crude oil imports that year, according to U.N. figures.

27/05/2025

China’s Li Qiang calls on Asean, Gulf leaders to forge closer economic ties with Beijing

First three-way summit sees Li highlight ‘historical opportunity’ to create global cooperation model based on free trade and investment

Chinese Premier Li Qiang on Tuesday urged Asean and Gulf state leaders to increase cooperation with Beijing, his call coming at a time when China is seeking to strengthen global economic ties amid intractable trade tensions with the US.

Addressing the inaugural summit involving China, the Association of Southeast Asian Nations and the Gulf Cooperation Council (GCC), Li said that the three sides could create a “vibrant economic circle” through deeper exchanges to benefit each nation as well as global development.

“We should firmly grasp this historical opportunity, continuously enrich the power of trilateral cooperation, and strive to create a model of global cooperation and development,” he said in his opening remarks at the event in Kuala Lumpur, Malaysia.

26/05/2025

Ahead of ASEAN Summit, Malaysian FM Calls for Regional Action on US Tariffs

Along with the conflict in Myanmar, the issue of trade is likely to be high on the agenda at the 46th ASEAN Summit in Kuala Lumpur.

Malaysia’s foreign minister has called on Southeast Asian nations to deepen regional economic integration and present a united front in their attempts to address the current global trade uncertainties resulting from sweeping U.S. tariffs.

Speaking in Kuala Lumpur yesterday following a meeting of Association of Southeast Asian Nations (ASEAN) foreign ministers, Mohamad Hasan said that the bloc’s member states were among the nations “most heavily affected” by the “reciprocal” tariffs announced by President Donald Trump last month.

“The U.S.-China trade war is dramatically disrupting production and trade patterns worldwide. A global economic slowdown is likely to happen,” Mohamad said, according to an Associated Press report. “We must seize this moment to deepen regional economic integration, so that we can better shield our region from external shocks.”

In President Donald Trump’s “liberation day” tariff announcement on April 2, Southeast Asian nations were slapped with rates ranging from 17 percent (the Philippines) to 49 percent (Cambodia), the latter being among the highest of any nation. Recognizing the potentially existential threat that this poses to their model of export-led industrialization, several nations, including Vietnam and Thailand, have already begun negotiations with the Trump administration over a possible reduction of the tariffs.

As I noted last week, virtually every high-level bilateral meeting involving Southeast Asian nations over the past two months has included discussions of the U.S. tariffs and the resulting economic uncertainties, as well as pledges to deepen bilateral economic integration and bolster trade.

Alongside the conflict in Myanmar, the tariffs are likely to be high on the agenda during today’s 46th ASEAN Summit in Kuala Lumpur. Late last week, Nikkei Asia reported that ASEAN leaders are set to express “deep concern” over the Trump administration’s tariff policy at today’s 46th ASEAN Summit. The news outlet quoted a draft chairman’s statement asserting that rising uncertainties, including U.S. tariffs, “pose complex and multidimensional challenges to ASEAN’s economic growth, stability, and integration.” In response, ASEAN will reaffirm its “collective commitment to a rules-based, open, inclusive, transparent, and non-discriminatory multilateral trading system,” with the World Trade Organization at its core.

Since “liberation day,” Malaysia, the current ASEAN chair, has vowed to shepherd the creation of a united regional response to the Trump tariffs. In a statement in early April, Prime Minister Anwar Ibrahim said that his government “will lead efforts to present a united regional front, maintain open and resilient supply chains, and ensure ASEAN’s collective voice is heard clearly and firmly on the international stage.”

On April 10, Malaysia chaired a meeting of ASEAN economic ministers that affirmed the bloc’s support for “maintaining a predictable, transparent, non-discriminatory, fair, inclusive, and open regional economic environment which has underpinned growth in regional trade and development.” In a related meeting, Anwar called on ASEAN to “rely more on itself.” He said, “This means strengthening intra-ASEAN trade. We must move beyond rhetoric to execution.”

Speaking yesterday in KL, Mohamad said that Malaysia has requested the convening of a special summit with the U.S. in order to discuss tariffs and said that it was hopeful that this could happen later this year. This effort would complement the efforts of individual nations to negotiate an improved tariff deal with the Trump administration, although its success, given the very different trade relations that each ASEAN nation has with the U.S., remains uncertain.

In light of the considerable challenges that ASEAN faces in increasing intra-regional trade – intra-bloc trade made up just 21 percent of the ASEAN total in 2024, according to ASEANstats data cited by Nikkei Asia last month, compared to around 60 percent for the European Union – the preferred option will likely be to pursue a more even spread of trade with external partners.

In 2024, China accounted for 20 percent of regional trade, with heavy ASEAN imports. The U.S. followed with 12 percent, made up mostly of exports from ASEAN member states. The European Union made up 8 percent, while trade with the six GCC members made up around 3.5 percent.

On this front, Malaysia’s Investment, Trade, and Industry Minister Tengku Zafrul Aziz announced yesterday that ASEAN has concluded negotiations on upgrading the ASEAN Trade in Goods Agreement, first signed in 2010, and the China-ASEAN Free Trade Area, which was agreed in 2002. According to a report by Channel News Asia (CNA), the enhanced deals are expected to be signed in October, Malaysia’s told reporters yesterday.

“We remain confident that these milestones will serve as a pivotal enabler for ASEAN’s sustained growth and competitiveness,” Tengku Zafrul said after chairing an ASEAN Economic Community Council Meeting, CNA reported. He also warned the bloc against inaction as it seeks “to navigate an increasingly volatile global economic landscape.”

“ASEAN would need to break away from a business-as-usual approach,” Tengku Zafrul added. “We need to adopt bolder, more agile and more forward-looking strategies. We need to safeguard and advance ASEAN socioeconomic interests.”

Tengku Zafrul said every ASEAN member is a “sovereign nation” and should be supported in pursuing bilateral tariff negotiations with Washington. “But it’s important that in all these meetings, we also reiterate the ASEAN position,” he added.

There is also a strong likelihood that ASEAN will continue to reach out to other economic partners, and reduce its overall reliance on the United States as an export market. Today’s ASEAN Summit will be followed by the second summit between ASEAN and the Gulf Cooperation Council (GCC), which comprises. Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. This will then be followed by the first-ever meeting between ASEAN, China, and the GCC. It would be unsurprising if both of these meetings did not include a heavy emphasis on economic and trade cooperation.

25/05/2025

Việt Nam-Malaysia trade records strong growth over past decade

KUALA LUMPUR — Bilateral trade between Việt Nam and Malaysia has recorded remarkable growth over the past decade, rising from US$8 billion in 2015 to $14.2 billion in 2024, and is well on track to reach the target of $18 billion ahead of schedule.

According to Vietnamese Trade Counsellor in Malaysia Lê Phú Cường, since the two countries elevated their relationship to a strategic partnership in 2015, Malaysia’s exports to Việt Nam have soared by around 160 per cent. This surge reflects Việt Nam’s growing demand for essential production inputs such as fuel, electronic components, and petroleum products, which are crucial for its export-oriented economy.

Meanwhile, Việt Nam’s exports to Malaysia have also risen by more than 80 per cent, with notable gains in agricultural and processed goods.

In 2024, Vietnamese rice emerged as one of Malaysia’s top three imports, alongside electronics and steel. Coffee exports from Việt Nam also posted robust growth, driven by Malaysia’s limited domestic production.

On the investment front, by the end of April 2025, Malaysian investors had 770 valid projects in Việt Nam, with total registered capital nearing $13.6 billion. Malaysia ranks 10th among 150 countries and territories investing in Việt Nam, and third within the Association of Southeast Asian Nations (ASEAN).

Malaysian investment spans 18 out of Việt Nam’s 21 economic sectors. The largest share is in education and training, with seven projects worth over $3.6 billion. This is followed by the manufacturing and processing industry, with 249 projects totalling nearly $2.9 billion (21.2 per cent of total investment), and the power and gas sector, with five projects worth almost $2.5 billion (18.2 per cent).

Conversely, Vietnamese investors have invested in 27 projects in Malaysia with total registered capital of $854.8 million, largely concentrated on mining ($804.2 million). Other areas of investment include professional, scientific and technical services ($43.7 million), as well as wholesale, retail, and vehicle repair.

Cường noted that Vietnamese businesses faced intensifying competition in the Malaysian market, which has free trade agreements not only with Việt Nam but also with other regional economies such as China, Thailand, and Indonesia. He urged Vietnamese firms to make greater efforts and strategic engagement to secure a firm foothold in this market. — VNS

24/05/2025

Eco-Shop Marketing ends Main Market debut with 6% gain

KUALA LUMPUR (May 23): Eco-Shop Marketing Bhd (KL:ECOSHOP) rose 6% on its first day on the Main Market of Bursa Malaysia, after the dollar-store retail chain lowered the offering price of its shares.

Shares of Eco-Shop opened at RM1.25 on Friday, versus its initial public offering (IPO) price of RM1.13 per share. The stock eased but remained above water and ended Friday at RM1.20, after more than 200 million shares exchanged hands.

A day before the listing, Nomura and UOB Kay Hian initiated coverage on Eco-Shop with “buy” calls and target prices of RM1.35 to RM1.45.

The gain on Friday also injects more hope into Bursa Malaysia, which has recently suffered a slew of first-day listing flops and weakened investors demand.

Eco-Shop’s own IPO saw applications from retail investors barely covering the shares allocated, though the institutional tranche was fully taken up. The company then cut its final IPO price by about 7% ahead of the listing.

Gross proceeds totalled RM974 million, the largest since minimart operator 99 Speed Mart Retail Holdings Bhd’s IPO (KL:99SMART) raised RM2.36 billion in August 2024.

Before launching the IPO, Eco-Shop signed up 10 cornerstone investors — including AHAM Asset Management, Areca Capital Sdn Bhd, and Eastspring Investments Bhd — that collectively took up more than 90% of the institutional offering.

Cornerstone investors — typically large institutional investors such as pension funds and insurers — commit to take up a portion of IPO shares before they are marketed to other retail and institutional investors. Their presence helps to build up other investors’ confidence for the shares during the IPO.

The IPO raised RM392 million for Eco-Shop and another RM582 million for its selling shareholders that include founder and managing director Datuk Seri Lee Kar Whatt, as well as Creador — a private equity firm.
Creador is also the same firm that backed home improvement retailer Mr DIY Group (M) Bhd (KL:MRDIY).

Eco-Shop operates more than 350 stores nationwide, selling over 10,000 products that include third-party brands, ranging from daily essentials to household items, mostly priced at RM2.60.

Bulk of the proceeds from the IPO has been earmarked for expansion of its distribution centres and retail network. The company will also set aside some funds to repay bank loans, and upgrade its IT systems.

Maybank Investment Bank is acting as principal adviser, joint global coordinator, joint bookrunner and sole underwriter for the IPO. UBS Securities Malaysia and UBS AG Singapore are also joint global coordinators and bookrunners, while RHB Investment Bank joins as a joint bookrunner.

23/05/2025

US-China trade war is pushing Asian nations to pick sides, ministers warn

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The trade war between the US and China is putting south-east Asian countries under increasing pressure to pick sides between the world’s two biggest economies, government ministers have warned.

“China is looking and watching,” Malaysian trade minister Zafrul Aziz, who is leading tariff negotiations with Washington on behalf of the Association of Southeast Asian Nations, told the Financial Times.

“They are saying, ‘Whatever you give to the US, we want the same because whatever you give to the US is at our expense,’” Zafrul said.

Zafrul’s comments, echoed on Thursday by a warning from Singapore’s trade minister that neutrality in the region was becoming harder to maintain, highlight the rising tensions between Washington and Beijing since US President Donald Trump unveiled a package of tariffs last month.

Zafrul said the economic decoupling of the US and China was putting pressure on countries in south-east Asia — many of which are important hubs in supply chains linking the two economic superpowers — to pick one side over the other.

“We have to balance it by not choosing a side and by understanding each side’s concerns,” Zafrul added. “All countries [in the region] are having to navigate that. It is tough.”

Malaysia and Singapore find harder to maintain neutrality as geopolitical tensions grow

23/05/2025

Malaysia hosts ASEAN economic ministers & dialogue partners to reinforce rules-based multilateral trading system

As ASEAN Chair in 2025, Malaysia convened three virtual consultation sessions with ASEAN economic ministers and their counterparts from China, Japan, Australia, and New Zealand. The ministers reaffirmed their collective commitment to a rules-based multilateral trading system, anchored by the WTO, to ensure a fair, open, and sustainable trade and investment environment.
In its role as ASEAN Chair for 2025, Malaysia has facilitated three separate virtual consultations between ASEAN Economic Ministers and their counterparts from China, Japan, Australia, and New Zealand on 20 May 2025.

These discussions provided a platform to strengthen regional economic ties and deepen collaboration on shared priorities. Across all sessions, the ministers reiterated their shared commitment to a rules-based multilateral trading system anchored by the World Trade Organisation (WTO), emphasising the importance of maintaining a transparent, inclusive, and sustainable global trade environment.

Here is a breakdown of the consultations between the various ministers and Malaysia Minister of Investment, Trade and Industry, Tengku Zafrul Aziz:

Special AEM-MOFCOM Consultation with China

The consultation with China was co-chaired by Tengku Zafrul and Wang Wentao, Minister of Commerce, China. In recognition of how current global trade tensions could impact supply chain resiliency in the region, disrupt the global trade order, exacerbate trade tensions, and weaken confidence in the rules-based Multilateral Trading System (MTS), the ministers underscored the support for a predictable, transparent, non-discriminatory, free, fair, inclusive, sustainable, and rules-based multilateral trading system, with the WTO at its core.

Tengku Zafrul said: “Given various ASEAN countries’ deep embedment in global supply chains, any major geopolitical and geoeconomic uncertainties will also affect businesses and consumers not just within ASEAN, but also worldwide.

"All the ministers recognised the potential impact of such uncertainties on economic security and stability, and as such, reaffirmed the target to sign the ASEAN-China Free Trade Area (ACFTA) 3.0 Upgrade Protocol by this year, which is one of Malaysia’s Priority Economic Deliverables (PEDs) of its 2025 ASEAN Chairmanship."

This upgrade, he added, is envisaged to include new areas, such as digital economy, green economy, and supply chain connectivity.

The meeting underscored the importance of expanding trade through initiatives like the Regional Comprehensive Economic Partnership (RCEP), noting ongoing efforts to finalise accession arrangements for aspiring economies. ASEAN and China’s economic ministers reaffirmed their support for a rules-based multilateral trading system and called for deeper ASEAN-China cooperation to address disruptions — leveraging the WTO for constructive engagement and safeguarding members’ legitimate interests.

Special AEM- CER Consultation with Australia and New Zealand

The Consultation with Australia and New Zealand was co-chaired by Tengku Zafrul Aziz, Senator Don Farrell, Minister for Trade and Tourism, Australia and the Todd McClay, New Zealand’s Minister for Trade and Investment. Given the current challenging global trading landscape, the meeting reaffirmed the Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) principles of open, predictable, transparent rules-based and non-discriminatory trade.

In this regard, the meeting welcomed the entry into force of the Second Protocol to Amend the AANZFTA on 21 April 2025 for Australia, Brunei Darussalam, Lao PDR, Malaysia, New Zealand, and Singapore. The ministers also looked forward to its implementation by the remaining parties later this year, marking a significant step toward strengthening regional economic cooperation under this vital framework.

Tengku Zafrul said:

“I am pleased that the ministers gave their time and commitment to find workable solutions for ASEAN and its key trading partners amid the current tough trading landscape. Equally important is the ministers’ recognition of the importance of technical assistance and capacity building to ensure all AANZFTA parties can secure the benefits of open, rules-based trade."

"Australia and New Zealand’s support for the Regional Trade for Development (RT4D) Facility, for example, provides financial support for capacity building and implementation activities under AANZFTA and the RCEP.”

Special AEM-METI Consultation with Japan

The Consultation with Japan was co-chaired by Tengku Zafrul and Yoji Muto, Japan’s Minister of Economy, Trade & Industry.

The meeting reaffirmed ASEAN and Japan’s commitment to advancing the ASEAN-Japan Comprehensive Economic Partnership (AJCEP). It also noted ongoing efforts to implement, enhance, and broaden the RCEP Agreement, including finalising accession procedures for aspiring economies.

Tengku Zafrul said: “There are clear opportunities for ASEAN and Japan to forge collaborations to enhance supply chain resilience, as well as promote digital transformation, energy transition, innovation, and critical industries.

"To that end, the meeting committed to foster a conducive investment and trade environment in ASEAN as well as its sub-region and globally based on the principles of a level playing field.

"ASEAN and Japan will explore industry-specific cooperative initiatives such as those in the automotive sector, clean energy, and ethical, responsible development and deployment of artificial intelligence.”

14/05/2025

Bursa Malaysia reversed earlier losses to close in positive territory today, with the benchmark index edging higher on late buying across the board, an analyst said.
The gains were supported by above-average trading volume, reflecting renewed market sentiment.

Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng said key regional indices continued their uptrend following the 90-day trade war pause between the US and China.

13/05/2025

The ringgit closed lower against the US dollar today as investors scaled back their expectations for the US Federal Reserve (Fed) to cut interest rates.
This shift led to higher US Treasury yields and a stronger greenback.

SPI Asset Management managing partner Stephen Innes said that the market had previously expected three rate cuts by the Fed this year.