PETALING JAYA: Maybank Investment Bank Research (Maybank IB) remains constructive on Malaysian equities, advising investors to stay focused on domestic-driven sectors despite lingering geopolitical uncertainties.
“We remain bullish on Malaysian equities and stay focused on domestic-centric sectors and stocks, led by banks, consumer, construction, healthcare and renewable energy,” it said in its note.
However, it highlighted that the situation in the Middle East is still developing and remains unpredictable.
Nonetheless, it believes the impact will remain manageable unless tensions escalate significantly.
In the meantime, Maybank IB reckons volatility linked to the conflict could create tactical opportunities in sectors such as petrochemicals, shipping and plantations, particularly if higher oil prices support industry margins.
“There could be trading opportunities in Petronas Chemicals Group Bhd
and Press Metal Aluminium Holdings Bhd.
“The Middle East-related disruptions could keep effective vessel capacity tight due to route diversions, delayed network normalisation for Suez Canal transit, and higher bunker costs,” it added.
“These factors are supportive of elevated freight rates, particularly on Asia-Europe lanes, which could pose upside risk to Westport Holdings Bhd.
“Similarly, the plantation sector could see upside potential should crude oil prices rally sustainably above US$100 per barrel, making Indonesia’s B50 a reality.”
The research house lifted its end-2026 target for the FBM KLCI to 1,780, based on a valuation of 15.5 times 2027 earnings, reflecting confidence that earnings growth will continue despite global uncertainties.
Similarly, an economist told StarBiz that Malaysia remains relatively well-positioned, supported by a defensive market structure, ongoing fiscal measures, and a diversified export base that helps buffer external shocks.
He has kept his FBM KLCI target of 1,760, boosted by the country’s strong net inflow of foreign funds at RM1.28bil.
Meanwhile, Maybank IB pointed out that the fourth quarter of financial year 2025 results season was finally one with improved trends and visible earnings growth, with company performance particularly strong among large-cap stocks.
Notably, it said 87% of KLCI constituents reported results that were in line with or above expectations, led mainly by the banking sector.
It noted that banks remain the backbone of the Malaysian equity market, accounting for roughly 50% of KLCI earnings.
Plantation companies also performed well in the latest results season, while earnings upgrades were largely concentrated in banks, non-bank financial institutions and healthcare.
Conversely, the biggest downgrades were seen in construction, consumer, property and petrochemical stocks, although most revisions were relatively modest.
Overall, Maybank IB expects Malaysian equities to continue benefiting from domestic economic resilience, improving corporate earnings and steady sectoral growth, reinforcing its preference for companies tied closely to local demand rather than global trade cycles.
Meanwhile, another economist said he expects Malaysia’s economic fundamentals to remain robust, supported by strong tourism receipts and resilient discretionary spending, as reflected in healthy auto industry total volume trends.
He believes that the data centre theme will continue to gain traction, with earnings spillover now visible across construction and increasingly within telecommunication companies via stronger wholesale and enterprise data revenue.
