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Market Highlights
Economic Update
Mon, 19 Feb 2024 07:55 am
GDP 4Q23: Looking forward external demand to support 2024’s growth

Another quarter of subpar growth. Malaysia 4Q23 Real GDP expanded +3.0% yoy, marking a slight slowdown (vs 3Q23: +3.3% yoy) recorded in the preceding quarter, primarily due to declining exports. Full-year GDP for 2023 recorded slight growth of +3.7% yoy. While the said growth rate was sharply lower against +8.7% yoy recorded in 2022, the figure was in tune with the average across ASEAN countries. Considering seasonal adjustments, the Malaysian economy rose +2.0% qoq (vs 3Q23: +2.36%). The aforementioned performance fell below both the markets’ and our in-house expectations, which ranged from +3.4% to +3.5% yoy. This was mainly attributed to sluggish exports throughout the quarter, stemming from persistent weakness in external demand, coupled with robust imports.

Sluggish trade performance. In October to December period, Malaysia’s exports fell by -6.3% yoy, while imports declined -2.9% yoy. This led to a -3.2% yoy decrease in trade, with the trade surplus contracting approximately 46% yoy. On a brighter note, household spending remained the key driver of Malaysia’s economy, supported by an improved labour market and easing cost pressures (the unemployment rate in 4Q23 was at 3.6% compared to 3.4% in 3Q23). Meanwhile, on the supply side, the Services sector remained as the primary driving force behind economic growth, while all other sectors, except for Manufacturing, saw positive growth. Private final consumption expenditure and Gross fixed capital formation were the main driving forces on the demand side.

Market Outlook
Tue, 02 Jan 2024 08:47 am
1H24 Market Strategy - Ascending into the Year of Dragon

Summary

• Execution of key blueprints laid out in 2023 will be the key focal point to drive economic reformation, while the prospects of corporate earnings growth will entice market participants into the equity markets.
• Amidst the prospects recovery alongside with interest rate cuts from US that may drive investor back into emerging markets, we advocate investors to turn slightly aggressive with selective sector to be in focus such as construction, property, technology and healthcare.
• We also favour the renewable energy (RE) sector on the back of the various incentives to spur business to adopt more green and sustainable measures, coupled with tourism sector that will ride onto the full-blown recovery in global travel.
• Our 2024F and 2025F year-end target for FBM KLCI are 1,560 and 1,650 respectively, based on assigned 14.0x PE multiple.

Economic Update
Mon, 20 Nov 2023 08:53 am
Gross Domestic Product (GDP) – 3Q23 - On Course to Recovery Path despite Global Challenges Persists

Another quarter of lacklustre growth – Malaysia 3Q23 Real GDP grew +3.3% yoy (vs 2Q22: +2.9% yoy), while GDP increased 5.2% qoq (2Q23: -0.8% qoq). The aforementioned performance came above market’s expectations which stood at +3.0% yoy, mainly attributed by the slightly stronger than expected household spending and growth in investment which registered improvement of +4.6% yoy and +5.1% yoy respectively. This is underpinned by sustained growth of household spending, driven by improvements in the labor market (unemployment rate in 3Q23 was at 3.4% compared to 2Q23 at 3.5%), as well as advancements in multi-year projects and capacity expansion initiatives undertaken by businesses. Meanwhile in the supply side, improved performance was led by Services, Agriculture and Construction sectors. Cumulatively, the Malaysian economy grew +3.9% yoy for 9M23 as compared to +9.6% yoy in 9M22.

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