The geopolitical landscape has shifted dramatically following the November 2024 US presidential election, which saw Donald Trump’s victory. Initially, his win boosted market sentiment, with investors anticipating tax cuts and deregulation. However, increasing concerns have emerged as his administration’s unpredictable policymaking begins to test the resilience of the US economy. The aggressive pursuit of federal workforce reductions, tariffs, and mass deportations has created significant shocks, eroding confidence among businesses, households, and investors. Notably, the expected “Trump put” has been absent in his second term, with both the president and his advisors showing a higher tolerance for market corrections than many anticipated. This series of events challenges the long-standing narrative of US exceptionalism.
Ahead of “Liberation Day” on April 2, markets are adopting a cautious wait-and-see approach, closely watching Trump’s tariffs and any potential reciprocal measures. The announcement of 25% tariffs on auto imports on March 26, 2025, marked the initial steps toward “Liberation Day.” In response, the US-FOMC kept the policy rate at 4.25–4.50%, but downgraded GDP growth projections from 2.1% to 1.7%. Similarly, the OECD revised its global growth forecast for 2025 down to 3.1%, citing trade tensions and geopolitical uncertainties as significant factors. In the UK, economic growth slowed to 1.0% in January 2025, falling short of expectations. Meanwhile, Taiwan’s Central Bank lowered its growth forecast to 3.05%, with a potential rate cut if inflation drops below 1.5%. While these soft data points are concerning, the hope remains that they will not translate into broader weakness in the real economy.
Adding to the already tense geopolitical climate, the Li family’s prolonged struggle with China over the sale of Panama Canal ports to BlackRock has lasted longer than expected. Initially, CK Hutchison, led by Hong Kong’s wealthiest man Li Ka-shing, resisted China’s opposition. However, on March 28, reports revealed the deal’s delay as CK Hutchison backed down from finalizing the sale. China’s antitrust investigation into the US$23 billion transaction further intensified pressure. This standoff underscores the growing geopolitical tensions between China and the US. China’s public condemnation of CK Hutchison for allegedly prioritizing US interests over national security has raised significant concerns.
As global markets grapple with heightened uncertainty, we emphasize the importance of diversification and a focus on quality amid volatility. In this uncertain and volatile economic and policy landscape, we prefer companies with strong earnings visibility, particularly those that are more insulated from trade wars (e.g., domestic-focused sectors) or could even benefit from supply chain relocations due to the trade tension.
Phillip Capital Malaysia and our offerings
We reaffirm our belief that there are still opportunities in the market, and we maintain a discerning approach in choosing high-quality stocks for our portfolio. However, it is crucial to exercise caution and carefully select investment options to ensure the best risk-adjusted returns. By taking a vigilant and discerning approach, investors can potentially reap the benefits of the current market opportunities while minimising risks.
A noteworthy avenue for investors seeking diversification in their portfolio is through PhillipCapital Malaysia. PhillipCapital Malaysia offers multiple private mandate services managed by professional fund managers. By leveraging PhillipCapital Malaysia’s private mandate services, investors can enhance their resiliency, optimise portfolio performance, and navigate the complexities of the market with confidence.
We also offer both conventional and Shariah-compliant options to cater to the needs of all investors. For Malaysia’s mandates, we like:
- PMART/PMA Dividend Enhanced and/or PMART/PMA Dividend Enhanced ESG
Our PMART Dividend Enhanced and PMA Dividend Enhanced is an income-driven portfolio focused on high dividend-yielding equities. We apply the Dog of the Dow approach, screen and select top market cap stocks to minimise risk and ensure consistent performance. The portfolio is an equal weighting portfolio which reduces concentration risk and provides similar exposure to all clients, both initially and after rebalancing. We offer both conventional and Shariah investment options to cater to the diverse needs of our investors. Click here to learn more. We recently also introduced PMART/PMA Dividend Enhanced ESG Mandate as we remain dedicated to investing in ESG stocks given their stronger valuation and profitability.
- PMART/PMA ESG
Phillip Capital Malaysia offers discretionary portfolio that invests in stocks with high ESG ratings from the F4GBM and F4GBMS Indices, namely PMART and PMA ESG. There are both conventional and Shariah options available. To explore the companies in which both Conventional and Shariah ESG mandates invest, you can refer to the provided link.
- PMART/PMA Blue Chip and Opportunity
Our Blue-Chip portfolios primarily allocate our investments towards companies with large market capitalisations, while the Opportunity portfolios predominantly invest in companies with smaller market capitalisations. We also offer both conventional and Shariah-compliant options to cater to the needs of all investors.
Please click on the link to learn more or email us at cse.my@phillipcapital.com.my if you require any further information.
Disclaimer:
The information contained herein does not constitute an offer, invitation or solicitation to invest in Phillip Capital Management Sdn Bhd (“PCM”). This article has been reviewed and endorsed by the Executive Director (ED) of PCM. This article has not been reviewed by The Securities Commission Malaysia (SC). No part of this document may be circulated or reproduced without prior permission of PCM. This is not a collective investment scheme / unit trust fund. Any investment product or service offered by PCM is not obligations of, deposits in or guaranteed by PCM. Past performance is not necessarily indicative of future returns. Investments are subject to investment risks, including the possible loss of the principal amount invested. Investors should note that the value of the investment may rise as well as decline. If investors are in any doubt about any feature or nature of the investment, they should consult PCM to obtain further information including on the fees and charges involved before investing or seek other professional advice for their specific investment needs or financial situations. Whilst we have taken all reasonable care to ensure that the information contained in this publication is accurate, it does not guarantee the accuracy or completeness of this publication. Any information, opinion and views contained herein are subject to change without notice. We have not given any consideration to and have not made any investigation on your investment objectives, financial situation or your particular needs. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any persons acting on such information and advice.
