KUALA LUMPUR, March 29 — Malaysia and China are emerging as relatively resilient economies in Asia amid intensifying global energy market volatility due to the ongoing conflict in West Asia.
JP Morgan head of Asia and co-head of global emerging markets equity strategy, Rajiv Batra, told CNBC in an interview that, beyond China and Malaysia, most economies in the region appear more vulnerable to energy shocks. He noted that Malaysia’s strength lies in its energy export profile and disciplined policy framework, which provide a buffer against external pressures.
“Malaysia’s fiscal deficit was very much well under control due to government policy and inflation is not significantly high enough,” he said.
These factors help support not only the country’s equity markets but also its currency amid external pressures, he added.
For China, Rajiv noted that the country relies on imports for only five per cent of its electricity generation, with the bulk of electricity generated domestically. In addition, China maintains substantial strategic reserves and retains the ability to scale up alternative energy sources, including coal and renewables, if needed.
However, Rajiv warned that the broader outlook remains uncertain, and that if geopolitical tensions continue to disrupt oil and gas supply chains – particularly through infrastructure damage and logistical delays – global growth could come under pressure.
For equity markets, Rajiv said the immediate impact is expected in energy-sensitive sectors such as consumer goods, utilities, and downstream industries. However, he said if the situation is prolonged, it could trigger a wider impact on financials, technology, telecommunications, and even healthcare.
Despite these risks, Rajiv noted that markets have yet to fully price in a worst-case scenario and are still pricing a “muddle-through” scenario at this juncture. — Bernama