KUALA LUMPUR, Jan 23 (Bernama) -- Bursa Malaysia’s benchmark index recouped earlier losses to settle higher, maintaining a more than six-year high, buoyed by continued buying interest in technology stocks, while the strengthening of the ringgit against the US dollar further lifted investor sentiment. At 2.27 pm today, the local currency strengthened to 3.9992 versus the greenback, its strongest level in more than seven years. It was last seen at this level on June 18, 2018, at 3.9960/9990. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 2.85 points or 0.17 per cent to 1,719.99 from yesterday’s close of 1,717.14. The index surpassed its previous peak of 1,719.00 recorded on Feb 26, 2019. The barometer index opened 1.30 points lower at 1,715.84 and moved between an intraday low of 1,711.89 in early trade and a high of 1,723.41 in late afternoon before slipping slightly toward the close. However, market breadth was negative with decl...
Key Takeaways
Strong 4Q GDP reduces pressure for rate hikes
Stable OPR shifts focus from policy to earnings
Services and construction remain key growth drivers
Domestic demand stocks may outperform in 2026
Ringgit and inflation trends remain crucial watchpoints
Malaysia’s stronger-than-expected economic performance in late 2025 has reduced the urgency for policy changes, giving investors clearer signals on what matters next.
With 4Q2025 GDP growth coming in at 5.7%, economists now expect Bank Negara Malaysia to keep the Overnight Policy Rate (OPR) unchanged at its January meeting. Stable interest rates remove near-term policy uncertainty — but they also shift investor focus away from rate speculation and toward earnings, sectors, and currencies.
What Investors Should Watch Next
1. Earnings Momentum in Rate-Sensitive Sectors
A steady OPR supports bank margins, property developers, and consumer stocks by keeping borrowing costs predictable. With 2026 earnings growth projected at around 7%, investors should watch whether banks and domestic consumption plays deliver on expectations.
2. Services Sector as the Core Growth Engine
The services sector led 4Q growth, driven by retail, transportation, tourism, and food & beverages. This suggests consumer-facing and tourism-related stocks may continue to outperform, especially with Visit Malaysia 2026supporting demand.
3. Construction Activity and Project Flow
Construction outperformance, backed by non-residential buildings and specialised works, signals continued opportunities in infrastructure and construction stocks, particularly those with strong order books.
4. Ringgit Direction and Inflation Risks
Low inflation — expected at around 1.5% in 2026 — gives BNM room to stay accommodative. A stronger ringgitcould lower imported costs but may cap export-driven manufacturing upside. Currency trends will influence foreign fund flows and equity valuations.
5. Manufacturing vs Domestic Demand Balance
While domestic demand remains firm, manufacturing growth is expected to moderate due to weaker external demand for non-E&E exports. Investors may need to be selective, favouring companies with domestic exposure over export-heavy names.
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