CIMB Group Holdings Berhad – Market Impact of U.S. Fed Rate Cut and Recent Analyst Actions

1. Immediate Market Reaction

On 18 September 2025, the Federal Reserve announced a 25‑basis‑point cut to its policy rate, a move that was broadly anticipated by market participants. The announcement did not trigger a sharp market swing; instead, the reaction was muted, and the Fed’s dovish‑hawkish stance caused mixed sentiment in U.S. equities.

In Malaysia, the FTSE Bursa Malaysia KLCI fell below the 1,600‑point barrier, closing at 1,598.93—a decline of 12.77 points (0.79%). The drop was driven largely by heavy‑weight banking stocks, notably CIMB Group Holdings (ticker 1023) and PBBANK. The index’s intra‑day range was 1,597.72 to 1,606.86, and turnover for the morning session reached 1.40 billion units, worth RM1.10 billion.

2. CIMB Group Holdings – Stock Performance

  • Close price (16 Sep 2025): RM 7.52
  • 52‑week high (16 Sep 2025): RM 8.50
  • 52‑week low (16 Sep 2025): RM 6.21

The day’s trading reflected broader selling pressure on banking names. The index’s inability to hold the 1,600‑point threshold was attributed to the weight of CIMB and other banks, which experienced declines in the face of the market’s profit‑taking mode.

3. Analyst Coverage – Alliance Bank

On 17 September 2025, CIMB Securities Sdn Bhd downgraded Alliance Bank Malaysia Bhd from Buy to Hold. The downgrade was based on a projected reduction in earnings momentum over the next six to nine months. Key points from the analyst note:

  • Target price lowered to RM 4.70 from RM 4.80.
  • Expected return on equity (ROE) forecasted at 9.2 % versus 9.7 % previously.
  • Concerns highlighted include an asset‑liability mismatch following the July 25‑basis‑point cut to the overnight policy rate and potential asset‑quality deterioration later in the year.

While the downgrade focused on Alliance Bank, it underscored CIMB Securities’ caution regarding the broader Malaysian banking sector’s earnings outlook, which could indirectly influence market perception of CIMB Group Holdings.

4. Currency Impact

The Malaysian ringgit remained relatively stable against the U.S. dollar. After briefly weakening to 4.2000 on the day of the Fed announcement, the ringgit closed at 4.1968 per dollar, a 0.2 % decline from the opening level. The stability of the currency suggests that currency movements did not play a decisive role in the day’s equity market performance.

5. Summary

The 25‑basis‑point rate cut by the Federal Reserve was largely priced in by Asian markets, leading to a subdued response in U.S. equities and a moderate decline in the Malaysian benchmark index. CIMB Group Holdings, as a leading banking name, experienced a fall in line with broader sector selling, contributing to the index’s breach of the 1,600‑point threshold. Analyst activity on a peer bank—Alliance Bank—highlighted concerns over earnings pressure, which may affect investor sentiment toward the sector, including CIMB Group Holdings. The ringgit’s modest depreciation against the dollar indicates that currency dynamics did not significantly influence the market outcome on that day.