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Market Highlights
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.

Fri, 23 Jan 2026 07:29 am
KLCI Extends Gains Amid Easing Global Tensions

Malaysia Market Review: The FBM KLCI extended its upward momentum on Thursday, climbing 0.66% with lower liners following suit. Market breadth was positive, with 641 advancers outpacing 418 decliners as foreign investors remained net buyers. Sectoral performance was uniformly strong, with Construction (+1.15%), Industrial Products (+1.02%) and Finance (+1.01%) leading gains, while Healthcare (-0.07%) was the only sector ending in the red.

Global Markets. Bullish sentiment returned to Wall Street as the Nasdaq rose 0.91%, the Dow 0.63%, and the S&P 500 0.55%. Equities climbed after President Trump paused a planned 10% tariff on eight NATO members, easing near-term geopolitical tensions. While focus is shifting toward the broader earnings season, Intel shares slid in after-hours trading as soft guidance overshadowed a beat on earnings. In Europe, the STOXX 600 gained 1.03% on news of a US-European framework on the ‘Golden Dome’ missile defence system and Greenland’s mineral resources. This optimism extended into Asia, where the Nikkei 225 surged 1.73% and the KOSPI rose 0.87%.

 

Market Outlook. The FBM KLCI is expected to maintain a constructive bias, supported by sustained institutional participation and robust domestic fundamentals. In the US, steady November core PCE inflation at 2.8% YoY and an upward revision to 3Q25 annualised GDP growth to 4.4% have kept the Federal Reserve on track to hold interest rates steady at its next meeting. Investors will also monitor Japan’s inflation print and the upcoming Bank of Japan interest rate decision today for signs of future policy direction. Although data surprises may drive short-term volatility, the local market should remain underpinned by continued foreign interest and selective buying in large-cap stocks with clear earnings visibility.

Technical Calls
Stock Research
Derivatives Market Performance
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USD 3.933208 3.960978
EUR 4.682948 4.687965
CNY 0.567464 0.568085
HKD 0.503784 0.507349
SGD 3.099708 3.121871
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