Malaysia - Market Strategy

[winston]

Stock picking amid bear case index range

The stock market started the year on a volatile note with external uncertainties overshadowing fund flows and investment actions.

With the KLCI hitting below our bear case of 1,580 (lowest at 1,545), we list stocks that have declined by >10% over the month, offering an opportunity to accumulate, especially those that were affected by the AI-DC theme – PIE, YTLP, IJM, GAM, ECW.

Alternatively, investors could seek shelter in sectors that are agnostic to the AI-DC theme, domestic-driven and defensive; these would be banks (AMMB, CIMB, PBK), consumer (AEON, MRDIY, FFB) and healthcare (IHH, KPJ, OPTIMAX).

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/434299.pdf

[winston]

Anwar: Foreign holdings in local capital market remain around 19% as of Jan 2025

So far this year, the net inflow of bond investment is RM1.55 billion. Thus, if investors are not convinced, they would not have invested RM1.55 billion," he said.

Source: The Edge

https://theedgemalaysia.com/node/744279

[winston]

STRATEGY – MALAYSIA Infusing Some Of China’s Bull Run

Malaysian beneficiaries of China’s economic recovery may gain the spotlight, ahead of the anticipated China fiscal stimulus programmes and China president Xi Jinping’s planned visit to Malaysia.

Key Bursa-listed companies include companies with China operations (Hong Leong Bank), industrial metal exporters (Press Metal), blockchain platform creator MYEG, and tourism plays (Alpha IVF, Genting Malaysia, Pavilion REIT).

Source: UOBKH

https://research.uobkayhian.com/content ... e=hs_email

[behappyalways]

Malaysia stocks record longest outflow streak since June 2018
https://www.theedgesingapore.com/news/m ... -june-2018

[winston]

Tailwinds amid tailspins

Seize the opportunity during the tailspin

The KLCI has drifted further since our last report with added global volatility amid foreign outflows.

Despite external uncertainties, we believe there are opportunities to be seized on home ground.

Strong domestic catalysts still hold for the banks, consumer and healthcare sectors, not forgetting tourism.

The investment upcycle phase should still form a growth base for data centres and industrial properties.

Our top picks are Public Bank, AMMB, Aeon, Farm Fresh, KPJ, Gamuda, YTLP, Eco World, ITMAX and Solarvest.

Amid volatile markets, we also favour defensive picks with yields in Tenaga, Gas Malaysia and MISC.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/447464.pdf

[winston]

Fund flows indicate uncertainties

Data showed foreign funds have been net selling Malaysian stocks and total foreign shareholdings on Bursa Malaysia are now at near historical lows.

Foreign investors held some 19.6% of Bursa Malaysia’s market capitalisation as at end-February 2025.

This is just 0.2 percentage points above the all-time low of 19.4% in January 2025, which was the lowest since data became available in January 2007.

Investors are bracing that the impact from the tariff announcement could particularly be more pronounced in the technology sector.

Foreign investors extended their net selling streak on Bursa Malaysia for the 22nd consecutive week, registering a net outflow of RM1.25bil in the week ended March 21.

Foreign investors continued to net sell for the fourth consecutive week of the eight Asian markets that we track, with a total outflow of US$564.9mil last week,” said MIDF Research.

Indonesia had registered its ninth consecutive week of foreign outflows, totalling some US$432.1mil.

Thailand, meanwhile, recorded a US$103.9mil net outflow, extending its losing streak to four weeks until the week ended March 21.

The top-three sectors that recorded the highest net foreign outflows were financial services at RM609.7mil, industrial products and services at RM167.9mil and consumer products and services at RM148.4mil”.

Bargains may be present in banks, planters and the construction industries.

Source: The Star

https://www.thestar.com.my/business/bus ... ertainties

[winston]

Our Mar 25 Alpha Picks outperform.

Apr 25 picks: Alpha IVF, Duopharma, IJM, IOI Properties, TIME dotCom, MYEG, RHB Bank and Yinson.

Source: UOBKH

https://research.uobkayhian.com/content ... e=hs_email

[winston]

Navigating tariff volatilities

Stay opportunistic and selectively defensive Malaysia was not spared from Trump’s tariff list, but the situation is still fluid at the moment.

Macro issues rests on inflation (higher in the US; lower in the rest of the world) and growth (broadly slower).

Per our recent ‘Tailwinds amid tailspins’ report, we had already suggested to seize opportunities selectively while offering defensive options.

Domestic drivers and policy deliverables remain key to market re-rating.

We stay positive on banks, consumer and healthcare, while suggesting increased weightings in defensive stocks.

Our top picks remain unchanged with Public Bank, AMMB, Aeon, Farm Fresh (Padini is an alternative), KPJ, Gamuda, YTLP, Eco World, Frontken, ITMAX and Solarvest, while defensive picks stay as Tenaga, Gas Malaysia and MISC.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/448455.pdf

[winston]

At the drawing board

While tariff negotiations are ongoing…

The KLCI has finally inched above pre-Liberation Day levels but what will drive it further would be clear messaging on how Malaysia would be able to navigate macro headwinds amid Trump’s tariff trade war.

We keep our YE KLCI target at 1,700 though near term we believe it could hover around 1,560 (bear case).

Our strategy to stick to long term winners and defensive picks remains but as risk appetite increases, the tech sector could draw interest.

Our top picks remain unchanged with OWs in key domestic-driven sectors – banks, consumer, healthcare (hospitals).

Source: Maybank

chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://mkefactsettd.maybank-ke.com/PDFS/454704.pdf

[winston]

Risk-on opportunities emerging

Early signs of de-escalation send positive vibes In our last report, we highlighted our strategy to stick to long term winners and defensive picks but also added that as risk appetite increases, the tech sector could draw interest.

We believe there should also be interest in high beta stocks. With market likely in risk-on mode following news of US-China tariff de-escalation, we expect positive spillover effects to our market.

We expect the KLCI to trend above our bear case of 1,560 (14x PER) in the near term. Our YE KLCI 1,700 target (15x 2026 PER; 10-yr mean) remains.

Key risks still lie in the tumultuous global tariff negotiations. Any favourable outcome related to Malaysia should further boost sentiment.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/456776.pdf