Weekly Market Review
SHARE THIS PAGE:
A BRIEF ON GLOBAL MARKETS AND INVESTMENT STRATEGY.
WEEK IN REVIEW | 9 – 13 JUNE 2025

  • Global & Regional Equities

    U.S. equities ended the week lower, with the S&P 500 closing down 0.39% on Friday. Despite escalating geopolitical tensions, US Dollar and US Treasuries did not benefit from the typical flight-to-safety trade. Week on week, USD had a mixed performance where most G10 strengthened against the US dollar such as Norwegian and Danish Krone, Euro, Swiss Franc among others, while emerging market (EM) currencies such as Philippine Peso, Indian Rupee and South Korean Won weakened.

    In the US Treasury market, the 10-year yield initially declined to around 4.30% following weaker-than-expected Consumer Price Index (CPI) and Producer Price Index (PPI) releases midweek. However, yields reversed course by Friday, climbing back to approximately 4.4% as investors reassessed the geopolitical landscape and in anticipation of FOMC meeting in the coming week.

    Adding to the policy backdrop, Scott Bessent, U.S. Treasury Secretary, stated last week that with just over 20 days remaining before the 9 July tariff deadline, there is a high likelihood that the US will extend the current tariff pause. He noted that several countries, including the European Union, are negotiating in good faith, and even if a final agreement is not reached by the deadline, the existing terms may be rolled forward. Bessent added that ongoing trade discussions with key partners are expected to continue under the current framework in the interim.

    Looking ahead, markets will be focused on the upcoming Federal Open Market Committee (FOMC) meeting on 17–18 June. Investors are keen to see whether the US Federal Reserve (Fed) will revise its economic projections, particularly in light of recent tariff announcements and potential cost passthrough. While economic activity has shown signs of softening, many Fed officials have continued to sound cautious due to inflation concern.

    The Fed’s last economic projection was released in March and did not fully account for the potential inflationary effects of tariffs. As such, the market expects potential tweaks to the dot plot in the upcoming meeting. Current market pricing still anticipates two 25 basis point (bps) rate cuts by December 2025, though this remains highly data-dependent.

    In Europe, following 25bps rate cut by the European Central Bank (ECB), bringing total cuts to 200 bps from the peak, ECB members have struck a more cautious tone in recent remarks, signalling that further cuts would require stronger justification. Supporting this view, ECB Chief Economist Philip Lane and other officials reiterated last week that the rate path ahead would remain data-dependent. Consequently, eurozone markets have revised their expectations lower, now anticipating only one more rate cut by year-end.

    Asia 

    Markets were closely watching the outcome of the U.S.–China trade talks held in London. Both sides agreed to a framework aimed at de-escalating tensions. China announced it would remove some export restrictions on rare earth minerals for civilian use, though military-grade exports remain tightly controlled. President Trump also clarified that U.S. duties on Chinese imports would total 55%—a combination of the existing 25% tariffs on select goods and a new 30% across broader categories. Despite the progress on trade, investors remained cautious amid ongoing global uncertainties. Cash levels are around 1–2%.

  • Updates on Malaysia

    Last week, the domestic equity market remained relatively flat, with the KLCI inching up by just +0.09%. However, small caps took a hit, declining sharply due to rising geopolitical risks stemming from tensions in the Middle East. Year-to-date, the KLCI is down -7.6%, while the small-cap index has fallen by double that, at -14.6%.

    Foreigners returned as net sellers over the past few weeks. Year-to-date foreign outflows now total nearly RM11 billion—more than double the RM4.2 billion recorded whole of last year.

    In terms of news flow, the key headline locally was the government’s announcement to broaden the Sales and Service Tax (SST). Effective 1 July, the expansion will target higher-income groups, non-citizens, and large businesses, with an estimated revenue contribution of RM5 billion. While essential goods and services remain zero-rated, premium and non-essential items will be subject to a 5–10% tax. The service tax will also be extended to cover commercial building rentals, construction, financial services, healthcare, education, and beauty-related services.

    On the portfolio front, there was minimal trading activities. Some selective buying was seen in the REIT space, with additions to names such as Paradigm REIT and Pavilion REIT. Overall, cash levels remain steady in the mid-teens range.

  • Fixed Income Updates & Positioning

    Regional Fixed Income

    Asia credit delivered another positive return of +0.2% last week, supported by a rally in US Treasuries and continued spread tightening across both the investment grade (IG) and high yield (HY) segments, despite heightened geopolitical tensions.

    Investment grade spreads tightened by 4 basis points (bps), while high yield spreads tightened by 15 bps. Although spreads widened by 2–3 bps this morning, market conditions appear to be stabilising.

    On the portfolio front, we participated in three Australian dollar (AUD)-denominated Kangaroo bond issuances last week:

    • Emirates NBD Bank PJSC’s 10-year senior unsecured bond
    • Barclays PLC’s 11 non-call 10 senior note
    • NextEra Energy Capital Holdings, Inc.’s 30-year non-call 5 subordinated hybrid

    All three issues were priced in the 5.90% to 6.10% yield range, with order books oversubscribed by 2 to 4 times. Post-issuance, the bonds are trading 40 to 70 cents in the money, reflecting solid market reception.

    In the secondary market, we took profits on select AUD bonds following the rates rally and reallocated proceeds into newer issuances. Among the names exited were Qantas, Nestlé, HSBC, and NBN, with bonds yielding 5.0% to 5.5%. We also realised gains on the newly issued Prudential Singapore dollar (SGD) Tier 2 bond, selling at around 103.6 cash price.

    Domestic Fixed Income

    Sentiment in the Malaysian bond market was slightly weaker last week, amid cautious investor positioning. This was driven by headlines surrounding the expanded Sales and Service Tax (SST) and an uptick in long-tenure government bond supply.

    Yields for shorter-dated Malaysian Government Securities (MGS)—specifically those with maturities of seven years and below—rose by 2 to 6 bps, while longer-tenure yields remained relatively stable, with the 10-year up by only 1 bp and the 30-year unchanged. As of last Friday:
    • 3-year MGS: 3.17%
    • 7-year MGS: 3.46%
    • 10-year MGS: 3.55%
    • 30-year MGS: 4.01%

    On the fiscal front, the expanded SST is projected to raise an additional RM5 billion annually, helping to offset a RM3 billion shortfall in petroleum income tax due to lower oil prices. According to a recent CIMB report, fuel subsidy savings of around RM6.3 billion are also expected. Taken together, these developments suggest that the government remains on track to meet its 2025 fiscal deficit target of 3.8% of gross domestic product (GDP).

    Revenue collection also appears healthy, with RM97 billion collected as of April, representing 29% of the full-year target, in line with the same period last year.

    In terms of market reaction, local bonds adopted a more defensive tone amid inflation concerns, contributing to the rise in shorter-dated yields. However, the impact is expected to be minimal due to the highly targeted nature of the SST. Updates on fuel subsidy rationalisation indicate implementation in the second half of 2025, focused primarily on the top 10% income group (T10) and foreigners.

    Given the manageable inflation outlook and uncertain external backdrop, we continue to see room for monetary policy easing in Malaysia. We reiterate our view that Bank Negara Malaysia (BNM) may cut the Overnight Policy Rate (OPR) by 25 bps in the second half of 2025, potentially as early as the July Monetary Policy Committee (MPC) meeting, in line with market expectations.

    Lastly, two long-tenure government bond auctions were conducted last week, both of which were well received:
    • The 15-year MGS (RM4 billion total issuance, including RM1 billion via private placement) saw a bid-to-cover ratio of 2.85 times and an average yield of 3.71%.
    • The 30-year Malaysia Government Investment Issue (MGII) benchmark (RM5 billion total issuance, including RM2 billion via private placement) attracted strong demand, with a bid-to-cover ratio of 3.3 times and an average yield of 4.01%.

    Both auctions demonstrated continued investor interest in ultra-long-tenure bonds.

    As such, we maintain our current strategy for the domestic fixed income portfolio. We are comfortable keeping our portfolio duration between 6.5 to 7 years, while maintaining low cash levels to maximise return potential. 


This content has been prepared by AHAM Asset Management Berhad (hereinafter referred to as “AHAM Capital”) specific for its use, a specific target audience, and for discussion purposes only. All information contained within this presentation belongs to AHAM Capital and may not be copied, distributed or otherwise disseminated in whole or in part without written consent of AHAM Capital.

The information contained in this presentation may include, but is not limited to opinions, analysis, forecasts, projections and expectations (collectively referred to as “Opinions”). Such information has been obtained from various sources including those in the public domain, are merely expressions of belief. Although this presentation has been prepared on the basis of information and/or Opinions that are believed to be correct at the time the presentation was prepared, AHAM Capital makes no expressed or implied warranty as to the accuracy and completeness of any such information and/or Opinions.
 
As with any forms of financial products, the financial product mentioned herein (if any) carries with it various risks. Although attempts have been made to disclose all possible risks involved, the financial product may still be subject to inherent risk that may arise beyond our reasonable contemplation. The financial product may be wholly unsuited for you, if you are adverse to the risk arising out of and/ or in connection with the financial product.

AHAM Capital is not acting as an advisor or agent to any person to whom this presentation is directed. Such persons must make their own independent assessments of the contents of this presentation, should not treat such content as advice relating to legal, accounting, taxation or investment matters and should consult their own advisers.

AHAM Capital and its affiliates may act as a principal and agent in any transaction contemplated by this presentation, or any other transaction connected with any such transaction, and may as a result earn brokerage, commission or other income. Nothing in this presentation is intended to be, or should be construed as an offer to buy or sell, or invitation to subscribe for, any securities.

Neither AHAM Capital nor any of its directors, employees or representatives are to have any liability (including liability to any person by reason of negligence or negligent misstatement) from any statement, opinion, information or matter (expressed or implied) arising out of, contained in or derived from or any omission from this presentation, except liability under statute that cannot be excluded.
Hello, I'm Nadia. How may I help you?
Talk to Nadia
Close
Not sure what to ask? Try these.
  1. I forgot my i-Access password.
  2. How to perform redemption?
  3. What is the minimum amount to open an investment account?
  4. Checklist for deceased redemption.
  5. What is the best fund for me?
<  Slide to cancel
I'm listening ...
Click to stop recording
TENG CHEE WAI

Managing Director
Teng Chee Wai is the founder of Affin Hwang Asset Management Berhad (Affin Hwang AM). Over the past decade, he has built the Company to be the fastest growing and only independent investment management house in Malaysia’s top three, with an excess of RM47 billion in assets under management as at 31 December 2018.​

​In his capacity as Managing Director / Executive Director, Teng manages the overall business and strategic direction as well as the management of the investment team. His hands-on approach sees him actively involved in investments, product development and marketing. Teng’s critical leadership and regular participation in reviewing and assessing strategies and performance has been pivotal in allowing the Company to successfully navigate the economically turbulent decade.

Teng’s investment management experience spans more than 20 years, and his key area of expertise is in managing absolute return mandates for insurance assets and investment-linked funds in both Singapore and Malaysia. Prior to his current appointments, he was the Assistant General Manager (Investment) of Overseas Assurance Corporation (OAC) and was responsible for the investment function of the Group Overseas Assurance Corporation Ltd.​

​Teng began his career in the financial industry as an Investment Manager with NTUC Income, Singapore. He is a Bachelor of Science graduate from the National University of Singapore and has a Post-Graduate Diploma in Actuarial Studies from City University in London.
Ooops!
Generic Popup