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Market Highlights
Economic Update
Mon, 19 Jan 2026 07:46 am
Malaysia 4Q25 Advance GDP Estimate - Another positive surprise in 4Q25 GDP

Malaysia’s economy expanded by +5.7% YoY in 4Q25 (3Q25: +5.2%), the strongest pace since 2Q24. Full-year 2025 GDP grew by +4.9% (2024: +5.1%), above our estimate of +4.7%.

Manufacturing stood out, led by firmer E&E output amid the ongoing AI-led technology upcycle, while services remained the main anchor of growth momentum.

We reiterate our view that domestic demand will continue to anchor growth in 2026, supported by resilient private consumption and sustained investment activity.

The steady outlook for global semiconductor demand remains a key support for external sector in 2026, though external uncertainties persist, given the risk of semiconductor-related tariffs and a tariff-centric Trump policy stance.

A sustained positive performance into early 2026 could warrant upside revision to our current 2026 GDP forecast of +4.3% YoY. For now, we maintain our GDP forecasts at +4.7% for 2025 and +4.3% for 2026.

Economic Update
Mon, 12 Jan 2026 07:58 am
Malaysia Labour Market - Positive conditions supportive of growth outlook

The labour market remained resilient in November, with the unemployment rate easing further to an 11-year low of 2.9%.

Services should remain a key anchor for employment in 2026, supported by resilient consumption, Visit Malaysia 2026 and sustained investment flows.

Easing tariff concerns and steady global semiconductor demand provide further tailwinds for manufacturing, supporting continued hiring in the sector.

We maintain our unemployment forecasts at 3.0% for 2025 (11M25: 3.0%; 2024: 3.2%) and 3.1% for 2026.

Accordingly, we keep our GDP growth projections at +4.7% YoY for 2025 and a more moderate +4.3% for 2026 amid lingering external uncertainties.

Economic Update
Mon, 12 Jan 2026 07:56 am
Malaysia Industrial Production - Cautious optimism over 2026 outlook

• The Industrial Production Index (IPI) moderated to +4.3% YoY in November (Oct: +6.0%), below market expectations of +5.3%, driven by softer manufacturing and mining output.
• Manufacturing moderation was broad-based across both export- and domestic-oriented clusters, but E&E production remains firm at +10.8% YoY.
• The AI-led technology upcycle remains a key growth anchor, with a potentially favourable US Supreme Court tariff ruling providing upside, while the unwinding of front-loaded demand, potential US semiconductor tariffs and geopolitical risks could weigh on the 2026 outlook.
• We maintain our full-year 2025 GDP growth forecast at +4.7% YoY, before moderating to +4.3% in 2026 amid evolving global trade and geopolitical risks.

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