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Market Highlights
Economic Update
Fri, 10 Jul 2026 08:06 am
Malaysia Industrial Production - Near-term outlook improves, but risks remain in 2H26

• The Industrial Production Index (IPI) rose +8.4% YoY in May (Apr: +8.2%), albeit below market expectations of +9.4%, led by a sharp acceleration in mining output.
• Stockpiling activities should continue to support resilient manufacturing production and broader economic activity in 2Q26.
• Growth momentum could moderate in the coming months as the high base from last year kicks in and support from stockpiling activities fades.
• We remain cautious of the lagged impact from elevated material and logistics costs, as well as uneven supply disruptions across sectors.
• We keep our 2026 manufacturing growth forecast at +4.5% YoY (YTD: +6.4%; 2025: +4.5%).

Economic Update
Fri, 10 Jul 2026 08:00 am
BNM MPC Meeting - Stable OPR outlook as external conditions improve

• BNM kept the OPR at 2.75% at its July MPC meeting, in line with our expectations.
• The policy tone turned slightly more positive, with improving supply conditions and prices of key commodities supporting the global and domestic growth outlook.
• Nonetheless, BNM expects further upward pressure on inflation, underscoring its continued caution on the inflation outlook.
• We believe BNM remains comfortable with the current OPR level. However, the policy stance could turn more hawkish should there be signs of higher-than-expected inflation.
• With the growth and inflation outlook remaining broadly intact, we continue to expect BNM to maintain the OPR at 2.75% through 2026

Market Outlook
Thu, 02 Jul 2026 07:51 am
Market Outlook - Winners / Losers Of MYR Depreciation

• The FBM KLCI fell 57.96 points, or 3.4% month-on-month, in June 2026 weighed by foreign fund outflows, a stronger U.S. dollar and rising domestic political uncertainty.
• The Ringgit is likely to remain under near-term pressure amid a hawkish U.S. Federal Reserve, weaker regional currency performance and rising domestic political uncertainty ahead of the Johor and Negeri Sembilan state elections.
• A weaker ringgit favours export-oriented sectors, particularly Technology and Gloves, while sectors with significant USD-denominated costs, including Construction, Aviation, Autos and Consumer, are likely to face margin pressure.
• The Johor and Negeri Sembilan state elections will be closely watched as an early indicator of political dynamics ahead of GE16 and could influence investor sentiment toward Malaysian assets.
• Maintain our FBM KLCI year-end target of 1,787, supported by expectations of easing geopolitical risks, resilient domestic fundamentals and the potential start of a new market upcycle.
• Our top picks are Mi Technovation (BUY, TP: RM6.23), EG Industries (BUY, TP: RM2.69), MSC (BUY, TP: RM3.06) and MITRA (BUY, TP: RM1.28).

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