13/06/2026

Editorial T: 03-7784 6688 F: 03-7785 2625 E: sunbiz@thesundaily.com Advertising T: 03-7784 8888 E: advertise@thesundaily.com

SATURDAY | JUNE 13, 2026 SCAN ME Rakuten: Brace for more volatile market

national debt, interest rates and currency movements, which could collectively create a “perfect storm” for global financial markets. The United States remains at the centre of this dynamic, with national debt exceeding US$39 trillion (RM158.2 trillion) and annual interest payments estimated at US$1.2 trillion, placing increasing strain on fiscal sustainability. “In such circumstances, there are limited options for policymakers other than adjusting interest rates, which could weaken the US dollar and create further imbalances,” Yee said. He added that any move to lower rates to ease debt servicing could undermine confidence in US assets, while higher rates would exacerbate debt servicing burdens. Compounding the risks, Japan’s monetary tightening could trigger an unwinding of the yen carry trade, which may drain liquidity from global markets and intensify volatility. Despite the challenging external environment, Rakuten Trade main tains that Malaysia remains relatively resilient, describing the domestic market as a “captive market” sup ported by strong local institutional participation. The firm noted that total assets under management among Malaysian funds have reached about RM1.14 trillion, with more than half allocated

elevated and clouded the macro outlook. Yee said the adjustment also reflects the exclusion of selected companies with significant one-off impairments, notably large-cap names, from the earnings base, resulting in a more conservative but cleaner projection for the year ahead. Despite the down

to equities, providing a stabilising force for the market. The domestic base has helped cushion volatility, positioning the local bourse as a relatively stable environment compared with regional peers. However, external pressures continue to weigh on sentiment. Foreign fund flows have turned volatile, with a sharp net outflow recorded in May amid domestic political developments, effectively reversing earlier inflows. Retail participation, while showing some improvement, remains incon sistent due to the absence of strong market catalysts, suggesting limited momentum for a sustained rally. Given the current environment, Rakuten Trade expects the market to remain range-bound, with limited near-term upside. The revised FBM KLCI target of 1,770 is based on a price-earnings multiple of 17 times, reflecting a balanced view that incorporates both earnings prospects and prevailing risks. Looking ahead, Yee said market direction will continue to be shaped largely by global developments, particularly shifts in US monetary policy and geopolitical dynamics.

o Firm lowers year-end target for FBM KLCI, largely based on financials and earnings expectations, excludes political developments

a sensitivity analysis of the past five general elections and found no direct relationship be tween election out comes and market direction, unless the results were significantly beyond expectations. “Only in extreme cases, such as when Barisan Nasional lost power, did we see a negative market reaction. Other wise, there is no con sistent correlation.”

Ű BY HAYATUN RAZAK sunbiz@thesundaily.com

PETALING JAYA: Rakuten Trade expects heightened market volatility in the coming months and has cut its FBM KLCI target for year-end 2026 to 1,770 points from 1,800 points, citing external uncertainties driven by sovereign debt pressures, shifting interest rate expectations and currency volatility. Head of research Kenny Yee ( pic ) said the downward revision was largely driven by adjustments to earnings expectations rather than domestic political developments. “Our estimate on the KLCI did not include any impact from the political side. It is based mostly on the financials,” he said at Rakuten Trade’s Q3 market outlook briefing yesterday. Yee noted that while domestic political developments may create short-term volatility, historical trends show limited correlation between election cycles and overall market performance, except in extreme scenarios. He said Rakuten Trade conducted PRAI: Global AI-enabled automation and semiconductor equipment provider Galatek Technologies has established its first manufacturing facility in Malaysia, committing to invest up to US$100 million (RM406 million) over the next five years, strengthening Penang’s position in the global semiconductor and advanced manufacturing value chain. The new manufacturing, assembly and delivery facility, officially opened here yesterday, will serve as a regional production hub for semiconductor, advanced electronics and life sciences industries, supporting growing demand for automation, testing and AI-enabled manufacturing solutions. Backed by investors including Granite Asia, Singapore-based Galatek has invested about US$2 million in its initial Malaysian operations and plans to significantly expand production capacity, workforce development and local supply chain partnerships as part of its long-term growth strategy in Southeast Asia. The facility marks Galatek’s first manufacturing footprint in Malaysia and will serve as a key assembly, testing, and delivery centre for customers across Southeast Asia and global markets. Its operations will focus on advanced equipment manufacturing, system integration, assembly, testing and delivery, while increasing local Ű BY KIRTINEE RAMESH newsdesk@thesundaily.com

grade, he noted that overall earnings momentum re mains “decent”, with growth expected to recover to 6.2% in 2027, indicating that the revision is largely a near-term recalibration rather than a structural deterioration. Sector-wise, the plant ation segment is expected to be a key outperformer,

supported by firmer crude palm oil prices and recent upgrades to earnings expectations, which could help offset weaker contributions from other sectors. Yee said global investment conditions have deteriorated since the previous quarter, with geo political tensions, particularly in the Middle East, keeping crude oil prices elevated and raising the risk of renewed inflationary pressures. The research house described the current macro environment as a “deadly love triangle” involving

As such, he stressed that the firm’s FBM KLCI projections do not factor in political developments and are instead based primarily on financial fundamentals, particularly earnings. Earnings growth for corporate Malaysia has been revised down to 5.4% for 2026 from 7.9% previously, following a round of “fine-tuning” by analysts amid heightened geo political uncertainties, particularly ongoing tensions in the Middle East, which have kept energy prices supplier participation and the localisation of procurement and manufacturing activities. The event was officiated by Penang Chief Minister Chow Kon Yeow, and attended by InvestPenang CEO Datuk Loo Lee Lian, Malaysian Investment Development Authority (Mida) Penang director Muhammad Ghaddaffi Sardar Mohamed, Granite Asia senior managing partner Jenny Lee, as well as industry leaders and stakeholders. Chow said Galatek’s decision to establish its first Malaysian manu facturing base in Penang reflected strong confidence in the state’s industrial ecosystem and growth potential. “Galatek’s commitment to further investment and workforce expansion in Penang reinforces the state’s reputation as the Silicon Valley of the East and a preferred destination for technology companies seeking to innovate, expand and thrive.” The investment was significant not only for its value but for the role it would play in strengthening Malaysia’s semiconductor and electrical and electronics (E&E) ecosystem, Chow said. “We welcome this investment because it is fundamentally an investment in technology. The facility will produce highly specialised equipment required by industries for testing and advanced manufacturing applications, while also providing AI related solutions,“ he added. Chow said it helps address existing

“While Malaysia offers relative stability, it is not immune to external shocks. Investors will need to navigate an increasingly complex and uncertain global landscape,” he said. Galatek opens first Malaysia facility, eyes US$100m investment in Penang

From left: Lee, Muhammad Ghaddaffi, Loo, Chow, Tian, Galatek COO Jian Shen and general manager (Malaysia) Raining Zhang at the ribbon-cutting ceremony during the opening of the Galatek Penang Global Manufacturing and Delivery Hub.

a pivotal time as demand for AI-enabled semiconductor and advanced manu facturing equipment continues to accelerate worldwide. “The companies that have built the right capabilities ahead of this curve will define the next decade. Galatek is one of them.” She added that Penang’s strong industrial heritage, engineering talent pool and supportive policy environ ment made it an ideal base for the company’s next phase of growth. The Penang facility is expected to create between 20 and 30 jobs this year across engineering, operations, procurement, sales and technical support functions. Galatek plans to expand its Malaysian workforce to around 100 employees over the next five years as production scales up.

offered a compelling platform for advanced manufacturing, supported by a skilled workforce, established semiconductor supply chains and a business-friendly environment. “Penang was selected as a strategic location for our regional manu facturing and delivery operations because of its deep industry expertise and strong connectivity to global markets,” he said. “The opening of this facility marks an important milestone in our long term Southeast Asia strategy. Beyond manufacturing, we aim to build local engineering capabilities, deepen collaboration with Malaysian suppliers and contribute to the continued growth of the country’s high-tech nology industries.” Lee said Galatek’s expansion came at

gaps in our supply chain and strengthens Malaysia’s ability to support both domestic manufacturers and international customers. “While the investment may not be among the largest in monetary terms, it is strategically important in re inforcing our position as a semi conductor and E&E hub. It also supports the growth of the life sciences sector,” he said. Founded as an AI automation solutions provider serving the semiconductor and life sciences in dustries, Galatek develops tech nologies that combine advanced optics, precision motion control, artificial intelligence and automation to improve manufacturing efficiency and process accuracy. Galatek CEO David Tian said Malaysia