Malaysia’s AI-Led Stock Rally Falters in Face of Trade Risks

An artificial intelligence-led rally that helped Malaysian stocks outperform regional peers last year is fast unraveling, with escalating trade risks seen to further dampen the market’s appeal.

Concerns are growing over the potential fallout from a US plan to restrict AI chip exports, which may undermine the country’s burgeoning data center sector. Sentiment has also soured, with growth prospects clouded after President Donald Trump threatened to impose a higher tariff of 25% on Malaysia. That’s weighed on the benchmark index, making it the worst-performing market in Southeast Asia after Thailand.