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Market Highlights
Economic Update
Mon, 13 Jul 2026 07:33 am
Malaysia Labour Market -  Steady outlook despite modest headwinds in 2H26

• The unemployment rate stayed at 3.0% in May, in line with resilient domestic activity. 
• Labour market conditions should remain stable, supported by firm domestic demand and continued strength in export-oriented industries.
• We remain cognisant of potential lagged impacts from elevated material and operating costs on business activity and hiring in 2H26.
• We maintain our unemployment rate forecast of 3.0% in 2026 (2025: 3.0%).

Market Outlook
Mon, 13 Jul 2026 07:14 am
Market Outlook - Johor Strengthens the Case for GE16

• BN’s stronger-than-expected victory in Johor validates our Scenario 2 and reinforces UMNO’s political dominance ahead of GE16. 
• We believe the result materially strengthens the case for an early GE16 in 2H26, with the Negeri Sembilan state election serving as the next key political catalyst.
• The higher probability of an early GE16 is expected to raise political risk premiums and increase near-term market volatility, although we view any election-related weakness as temporary.
• We maintain our FBM KLCI year-end target of 1,787 and continue to view election-driven weakness as a buying opportunity.
• 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: RM1.27).

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%).

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Settlement Rates
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USD 4.055899 4.084367
EUR 4.648401 4.653222
CNY 0.600003 0.600626
HKD 0.517371 0.521010
SGD 3.141076 3.163219
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