Malaysia - Market Strategy

[winston]

Malaysia Strategy: 1Q25 wrap Underwhelming but… there is still hope

A generally soft quarter 1Q25 was not a pleasant quarter, being tilted to a negative bias.

Even the banking sector saw misses when they typically have an unblemished track record.

Post-1Q25, we downgraded banks and O&G to NEUTRAL while KLCI earnings growth is moderated to 2.5%/7.7% for 2025/2026E, mainly due to banks.

A key upgrade was Tenaga (BUY from HOLD). With decent upside to key KLCI component stocks, we believe the KLCI still has upside though we have lowered our YE target to 1,660 (from 1,700).

We remain POSITIVE on domestic-driven sectors: consumer, REITs, renewable energy and healthcare. We expect some recovery in 2H25.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/463840.pdf