KUALA LUMPUR (Sept 4): Malaysia would outperform Asia ex-Japan stocks and its economy could gain some indirect benefits if Donald Trump returns to power for the second time, Nomura said.
Ongoing supply chain shifts could accelerate and mitigate any trade impact, Nomura said in a report analysing the potential second Trump presidential term. There are also other pull factors, such as structural reforms, technology investments, and big-ticket infrastructure projects, the house noted.
“These factors are providing a significant offset that might still increase over time,” Nomura said.
Malaysia has seen rising foreign direct investment from both the US and China, as global companies seek to dodge punitive tariffs imposed during Trump’s first term as president in 2017-2021.
As the latest Republican presidential candidate, Trump is going into the US election in November, promising far more prohibitive trade policies than those implemented during his previous term, and may step up trade war with China.
“Malaysia… has the greatest scope to move up the value chain” and its electronics sector would be at the forefront of investment flows, Nomura said.
Malaysia hosts some of the world’s largest electrical and electronics companies, ranging from semiconductor giant Intel to consumer electronics maker Samsung, and from computer storage company Western Digital to power tool manufacturer Bosch.
The country is also the seventh largest semiconductor exporter with 7% of global market share, and accounts for 13% of the global share of chip assembly, testing and packaging in the supply chain, according to the Malaysia Semiconductor Industry Association.
“These form part of the back-end semiconductor supply chain, which is a necessary manufacturing process in the production workflow” of all electrical and electronic products, Nomura said, flagging Inari Amertron Bhd (KL:INARI) and Globetronics Technology Bhd (KL:GTRONIC) as potential winners.
Higher tariffs on Chinese goods under Trump could boost Malaysia’s rubber glove industry, and manufacturers such as Hartalega Holdings Bhd (KL:HARTA) and Top Glove Corp Bhd (KL:TOPGLOV) could benefit from the tariff hikes, the house said.
Further, retaliatory tariffs by China on American farm products, including soybeans, could raise demand for competing palm oil, Nomura said, adding that gainers would be mainly producers like Kuala Lumpur Kepong Bhd (KL:KLK) and IOI Corporation Bhd (KL:IOICORP).
https://www.theedgemarkets.com/node/725467
Created by savemalaysia | Sep 04, 2024
Created by savemalaysia | Sep 04, 2024
Created by savemalaysia | Sep 04, 2024
Created by savemalaysia | Sep 04, 2024