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Market Highlights
Economic Update
Tue, 10 Feb 2026 07:53 am
Malaysia Industrial Production : Increasingly Positive Outlook for 2026

• The Industrial Production Index (IPI) rose +4.8% YoY in December (Nov: +4.3%), beating market expectations of +4.5%, driven by firmer manufacturing output.
• The export-oriented cluster posted another strong performance, supported mainly by E&E, while the domestic-oriented cluster held steady at +4.9% YoY (Nov: +4.9%).
• An improving global backdrop amid the AI-driven tech upcycle, coupled with resilient domestic demand, should continue to support Malaysia’s manufacturing sector.
• We remain cautiously optimistic as global trade dynamics stay fluid, with the AI tech upcycle, intermittent trade tensions, potential semiconductor tariffs and the pending US Supreme Court ruling on tariff legality among the key moving parts.
• We keep our GDP forecasts at +4.7% YoY for 2025 and +4.3% for 2026 for now. That said, recent domestic indicators suggest upside to our growth forecast. 

Economic Update
Thu, 29 Jan 2026 07:51 am
US FOMC Meeting - Fed keeps rate unchanged; shifts to wait-and-see mode

• The Fed held the policy rate at 3.50–3.75%, with Governors Stephen Miran and Christopher Waller dissenting in favour of a 25-bp cut.
• The Fed noted that the unemployment rate has “shown some signs of stabilisation” and that risks to inflation and employment have become more balanced, supporting a pause and pushing back the timing of rate cuts.
• The divergence between strong economic data and softer consumer sentiment suggests growth may be increasingly uneven.
• We still expect two 25-bp rate cuts in 2026, now pencilled in for June and July (versus April and June previously), bringing the target range to 3.00–3.25% by end-2026.
• With markets increasingly pricing in tolerance for a weaker dollar, we expect the FOMC decision to have only a limited impact on the dollar. Continued USD weakness should provide room for further ringgit appreciation.
• We see limited implications for BNM policy, with the OPR expected to remain at 2.75% through 2026 amid firmer domestic demand and improving external conditions.

Economic Update
Fri, 23 Jan 2026 07:36 am
BNM MPC Meeting - Cautious optimism with stable OPR outlook

BNM maintained the OPR at 2.75% in its January MPC meeting, in line with expectations.

BNM expects global growth to be supported by robust tech investment. Domestically, growth will be underpinned by steady labour market conditions, income-related measures and investment in mega infrastructure and smaller-scale public projects.

Headline inflation will stay moderate in 2026 amid easing global commodity prices, while core inflation remains stable in the absence of excessive demand pressures.

Overall, BNM holds a cautiously optimistic view on the growth outlook. While forecasts are kept unchanged for now, there may be room for upward revisions, with any adjustment earliest in March alongside the Annual Report release.

BNM highlighted that the current monetary stance remains appropriate, noting that only a much stronger growth trajectory or a material reduction in external uncertainties would warrant a rate hike to the previous 3.00% level.

Given the upside bias to growth and a benign inflation environment, we expect BNM to keep the OPR at 2.75% through 2026.

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