The Malaysian Portfolio has been sitting on a fairly substantial level of cash for some months now. In fact, we have been raising our cash level progressively this year, from less than 28% in early January to more than 80% by end-June.
Our increasingly defensive stance is attributed to growing concerns for exporter earnings amid US tariff uncertainties and the inevitable global economic slowdown, as well as the resulting spillover impact on the domestic economy. And indeed, stocks on Bursa Malaysia have been among the worst performers in the region so far this year, second only to Thailand — the FBM KLCI had declined by 7% at the point of writing (see Chart 1).
