Malaysia - Market Strategy

[winston]

Norway's sovereign wealth fund trims Malaysian equity exposure, ramps up investments in bonds

By Emir Zainul

The fund trimmed its holdings to 209 Malaysian stocks worth US$2.53 billion by June-end.

That compares to 217 firms valued at US$2.71 billion on its books as at end 2024.

Investments in several counters were also increased, most notably in Pentamaster Corp Bhd (KL:PENTA), which rose to 5.07% from 1.62%.

By asset classes, 70.6% of the fund was invested in equities and 27.1% in fixed income. Unlisted real estate made up 1.9% of its assets and the remaining 0.4% was in unlisted renewable energy infrastructure.

Source: theedgemalaysia.com

https://theedgemalaysia.com/node/766620

[winston]

Positive outlook for 2026

Malaysia’s 2026 outlook is turning increasingly upbeat, buoyed by fiscal consolidation, targeted subsidy reforms and structural investment momentum that could anchor stronger growth and a firmer ringgit over the next year.

We expect Bank Negara Malaysia to stay on hold in November, with scope for easing in the first quarter (1Q) of 2026 if non-electrical and electronics exports weaken.

Finance Minister II highlighted the potential for the ringgit to strengthen to just below four against the US dollar within 12 months.

The Finance Ministry views the JS-SEZ as a focal point for data centres, back-office relocations and high-value manufacturing.

It observed that public expenditure is projected at RM470bil in 2026 – a mildly expansionary yet disciplined stance – with greater reliance on GLIC and PPP funding for infrastructure.

Petroleum-related revenue is projected to decline from 16.9% (2025) to 12.5% (2026) of total revenue, offset by stronger sales and service tax collections (RM59.6bil) and e-invoicing enforcement to reduce leakages.

Source: The Star

https://www.thestar.com.my/business/bus ... k-for-2026

[winston]

Strategy | 1H26 Strategy: Fired Up For Outperformance

Malaysian equities are fired up for outperformance in 2026, fuelled by pre-GE domestic liquidity, the ringgit’s appreciation and corporate earnings growth recovery.

We introduce our end-26 FBMKLCI target of 1,760.

Adopt a risk-on mode with focus on various investment themes that heat up the power and building material sectors, followed by banking and plantation, and selected technology, consumer, property, and construction.

Top picks: Fraser & Neave Holdings, Hong Leong Bank, Gamuda, Pekat, SD Guthrie, Press Metal Aluminium, Sunway and Tenaga Nasional.

Source: UOBKH

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

[winston]

Malaysia Strategy Ready for takeoff

Malaysia’s cumulative exemptions from US reciprocal tariffs are one of the highest in ASEAN, making it less exposed to tariff risks.

Further narrowing of the FFR-OPR spread should continue to blow tailwinds for the ringgit and catalyse the Malaysian stock market, in our view.

Malaysia offers relative political stability alongside policy reforms that are bearing fruit. We introduce our 2026F KLCI target at 1,810.

Source: CGS

https://rfs.cgsi.com/api/download?file= ... 091C784E16

[winston]

Last run for the year

KLCI component stocks up for the last mile

Our latest top picks are crucial as KLCI index movers.

With just another two weeks to go to the year end, the question begs if our 2025 YE KLCI target of 1,660pts would be achievable.

As of Friday’s close of 1,637, it is just a mere 1.3% to our target.

If we would take a bolder wish to hit 1,700, we would need the rally on banking stock to persist.

Based on our estimates, every 5% increase in the top 3 banks would add 25pts to the KLCI.

We have BUYs on CIMB, Public Bank, RHB Bank, AMMB.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/504663.pdf

[winston]

Malaysia equities in 2026: Five themes to watch, from infrastructure to IPOs

by Tan Ai Leng

Bigger infrastructure cheques, a faster green-energy build-out, a firm ringgit and a livelier initial public offering (IPO) calendar.

Potential 2027 election could represent a tailwind for construction, building materials and selected industrials.

1. Infrastructure and construction
2. Green transition
3. Tourism rebound: Visit 2026
4. Digital economy
5. Trade diversification

Source: Business Times

https://www.businesstimes.com.sg/intern ... cture-ipos

[winston]

Malaysia has seen 4 times more foreign capital outflow from stock market this year. What’s at play?

Tepid growth prospects and cautious political outlook are why foreign investors have been pulling out.

As of Sep 30, net portfolio equity outflow from the Malaysian stock market this year hit RM16.4 billion (U$3.9 billion), about four times the full-year outflow of RM4.2 billion in 2024.

Foreign shareholding now stands at around 19 per cent of total market capitalisation and is at an all-time low. The shareholding ratio has fluctuated between 22 per cent and 23 per cent for some years.

Bonds are bleeding too: September saw RM6.8 billion in net foreign selling, reversing a brief inflow in August.

Foreign holdings stood at about RM275 billion at the start of January, rising to a high of RM302 billion at end May this year, before retreating to current levels.

Malaysia will be running a fiscal deficit that is set to amount to around 3.5 per cent of national economic output.

Source: CNA

https://www.channelnewsasia.com/asia/ma ... zY5PMLyEcw

[winston]

Staying strong

Bull case scenario could turn to a reality

The KLCI has surpassed our YE target of 1,730 (15x 2027E PER).

We did flag a bull case scenario of 1,850 (16x 2027E PER) which should reflect the manifestation of the investment upcycle at its full potential.

Our bottom-up estimate suggests a KLCI target close to 1,850 based on our latest TPs.

Our TOP PICKS are unchanged (pending FY25 results) but we are recalibrating our TOP-TOP PICKS with CIMB, IHH, Press Metal, SD Guthrie, Westports and ITMAX.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/509192.pdf