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Market Highlights
Market Outlook
Fri, 21 Aug 2026 08:35 am
Market Strategy - KLCI 50: A Broader Benchmark, Creating New Alpha

• KLCI to expand from 30 to 50 constituents in two phases (Dec-26 and Jun-27), creating a broader and more diversified benchmark.
• The current KLCI remains highly concentrated, with Banks and Utilities accounting for 43.1% and 16.4% of the index respectively, while Technology has no representation.
• Technology and Construction should be the clearest sector beneficiaries from broader benchmark representation.
• The two-stage implementation should create an extended period of index-related positioning rather than a single rebalancing event, with the 20 new constituents introduced at 50% of eventual weights in Dec-26 and reaching full weight in Jun-27.
• We favour fundamentally strong potential entrants where index inclusion is an additional catalyst, rather than treating index eligibility as the investment thesis.
• Key risks are front-running, valuation premiums and buy-the-rumour/sell-the-fact dynamics. We maintain our year-end KLCI target of 1,770.

Economic Update
Fri, 21 Aug 2026 06:50 am
Malaysia External Trade - Sustained momentum lifts trade outlook  

• Exports grew +38.0% YoY in July (Jun: +45.5%), while imports remained firm at +36.4% (Jun: +43.1%). Consequently, the trade surplus widened to RM22.5bn (Jun: RM15.8bn).
• Manufacturing (+42.6% YoY; Jun: +47.4%) remained the key growth driver, while commodity exports were mixed.
• Overall, trends in capital and intermediate goods imports suggest firm industrial activity that should continue to support export growth towards year-end.
• We raise our 2026 export growth forecast to +26.2% YoY (previously: +16.3%), reflecting robust 7M26 growth of +29.2%.
• We are particularly positive on E&E and commodity exports, albeit with increasing headwinds towards year-end.

Market Outlook
Thu, 20 Aug 2026 09:56 am
Market Outlook - Malaysia-Taiwan Tensions: Shake, Don’t Break

• Taiwan-Malaysia diplomatic tensions have flared up following PM Anwar Ibrahim’s remarks on Taiwan, raising concerns over regional stability and Taiwanese investment sentiment.
• We see the development as more of a sentiment risk than a fundamental growth shock, with FDI confidence the key transmission channel.
• Near-term earnings impact on technology companies should remain minimal, although counters with higher Taiwan exposure warrant closer monitoring.
• The FBM ACE Index looks increasingly stretched, with forward P/E at 19.8x and technical indicators pointing to higher profit-taking risks. 
• We remain constructive on Malaysian equities, maintaining our FBM KLCI year-end target of 1,770 and favouring a barbell investment strategy.

Technical Calls
Stock Research
Derivatives Market Performance
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Currency Buy Rates (RM) Sell Rates (RM)
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EUR 4.729360 4.738927
CNY 0.601158 0.601778
HKD 0.513500 0.517628
SGD 3.169857 3.195407
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