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

[winston]

Investors focus on value stocks with liquidity

The stocks in focus include YTL Power International Bhd, IJM Corp Bhd, Sime Darby Property Bhd, and CIMB Group Holdings Bhd.

Kenanga Research said a favourable tariff differentiation outcome would help the tech sector, particularly certain tech stocks such as PIE Industrial Bhd and SKP Resources Bhd who can crystalise their pipeline of potential relocating customers.

Our top market picks see CIMB join the likes of AMMB Holdings Bhd, Tenaga Nasional Bhd, Fraser & Neave Holdings Bhd, Gamuda Bhd and YTL Power but Malayan Banking Bhd is dropped.

Source: The Star

https://www.thestar.com.my/business/bus ... -liquidity

[winston]

Malaysia Strategy From rout to recovery

We expect tariff tensions to ease in 2H25F and remain cautiously optimistic that Malaysia and the US can reach a mutually beneficial trade agreement.

With the Fed projected to resume its rate cut cycle, further narrowing of the FFR-OPR spread should blow tailwinds for the ringgit and local bourse.

Our year-end KLCI target is penned at 1,670 (15x P/E tagged to 2025F EPS). Rock-bottom foreign shareholding offers downside cushion, we opine.

Source: CGS

https://rfs.cgsi.com/api/download?file= ... 96937AEBE0

[winston]

Tong's Portfolio - Malaysian Portfolio to stay defensive amid challenging outlook across major sectors

By Tong Kooi Ong + Asia Analytica

We have been raising our cash level progressively this year, from less than 28% in early January to more than 80% by end-June.

Growing concerns for exporter earnings amid US tariff uncertainties and the inevitable global economic slowdown.

All major sectors are in negative territory, except for real estate investment trusts (REITs).

Manufacturing-related sectors, particularly glove manufacturers (under healthcare), semiconductor players (technology) and various firms within the industrial products and services sectors, have been among the hardest hit.

On the other hand, sectors with relatively stable earnings — such as REITs, plantations, construction and financial services — have shown more resilience,

Source: The Edge Malaysia

https://theedgemalaysia.com/node/763507

[winston]

Net selling of stocks by foreign, local funds continues

MBSB Research said foreign investors remained as net sellers of Malaysian equities for the third straight week, with a net outflow of RM89.9mil.

This was, however, smaller than the previous week’s outflow of RM206.1mil.

The top-three sectors that recorded the highest net foreign inflows were transportation and logistics (RM158.7mil), utilities (RM69.5mil) and construction (RM51.4mil).

The top-three sectors that recorded the highest net foreign outflows were financial services (RM174.1mil), technology (RM80.8mil) and telecommunications and media (RM70.8mil).

Local institutions also extended their net-selling streak to two consecutive weeks, registering a net outflow of RM15.5mil.

Local retailers continued their net buying activities, extending to a three-week consecutive streak of purchases, posting a net inflow of RM105.4mil.

Source: The Star

https://www.thestar.com.my/business/bus ... -continues

[winston]

13MP: Aligning ambitions Setting the stage for the next 5 years

The timing of the 13th Malaysia Plan (13MP) could not be more timely considering we are at a cross roads to balance external headwinds despite having strong domestic tailwinds.

The 13MP is set to raise development spending to boost domestic demand as the country’s key growth engine.

Standouts in the 13MP were the focus on high value manufacturing and industrial parks with broad infra spending as enablers.

Beneficiaries include the plantations, property, construction, ports and tech sectors.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/474506.pdf

[winston]

13th Malaysia Plan: no KVMRT3 gravy train but still POSITIVE

Maintain POSITIVE The huge development expenditure allocated to the 13MP ought to translate into many meaningful construction jobs from 2026-2030 even without KVMRT3.

Notable ‘megaprojects’ in the 13MP are port related, from which Muhibbah Engineering, IJM and WCT ought to benefit.

Other notable projects involve water, flood mitigation, industrial parks, highways, roads and hospitals, from which IJM, Gamuda and WCT ought to benefit the most. Cahya Mata Sarawak gets a special mention too.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/474941.pdf

[winston]

STRATEGY – MALAYSIA Alpha Picks: Some Opportunities Amid A “Summer Lull”

Our Jul 25 Alpha Picks outperformed the FBMKLCI (+5.6% vs -1.3%), driven by our bets on construction-related stocks, and on a pragmatic US trade deal being struck which rerates semiconductor stocks (channel checks suggest that Malaysia’s onshoring status remains intact).

Our Aug 25 picks have factored in a relatively positive outcome of the US trade deal and likely arrival of a “summer lull” for Western equities.

Aug 25 picks: Coraza, Eco World, Gamuda, Hume Cement, IJM Corp, Inari, RHB Bank and Zetrix.

Source: UOBKH

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

[behappyalways]

Nine Malaysian firms make the cut in Forbes Asia's Best Under A Billion 2025
https://www.thestar.com.my/business/bus ... llion-2025

[winston]

US tariff may dent Malaysia's exports, electronics industry could be spared, says RHB Research

By Xuen Lin

The tariffs could shave up to 0.43 percentage point off Malaysia’s economic growth.

Apart from direct impact, the house said the effect will be felt through spillover from China, weaker US consumer spending, and softer global semiconductor sales.

Malaysia’s semiconductors and integrated circuits exports to the US, valued at US$12.35 billion (RM52.11 billion) in 2024, or about 3% of the country’s gross domestic output, could be in the cross hairs.

Still, the US has dangled potential exemptions for companies manufacturing in the US or pledging to do so.

Nearly two-thirds of Malaysia’s semiconductor exports to the US come from American companies based locally, the house noted, adding that the companies, which already have manufacturing footprint in the US, are likely to secure exemptions and further mitigate the potential impact.

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/766368