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Market Highlights
Economic Update
Tue, 23 Dec 2025 07:48 am
Malaysia Inflation Rate - Modest inflation to persist into 2026

Headline inflation edged up to +1.4% YoY in November (Oct: +1.3%), slightly below consensus of +1.5%, underscoring the benign inflation backdrop.  

Core inflation held at a solid +2.2% YoY (Oct: +2.2%), supporting our view that domestic demand strength will carry into next year amid a volatile external environment. 

We maintain our full-year 2025 inflation forecast at +1.4% YoY, in line with the +1.4% average in 11M25.    

Given the muted policy pass-through from the SST expansion, we revise our 2026 inflation forecast lower to +1.8% YoY (previously +2.0%), implying only a modest pickup next year.

Economic Update
Mon, 22 Dec 2025 07:42 am
Malaysia External Trade - Positive trade lifts growth outlook

• Malaysia’s export growth held up at +7.0% YoY in November (Oct: +15.7%), albeit easing from October’s surge and undershooting market expectations, while gross imports jumped to +15.8% (Oct: +10.0%). The trade surplus narrowed to RM6.1bn (Oct: RM20.4bn).
• Manufacturing exports expanded at a softer pace, with E&E pulling back from October’s surge (+15.0% YoY; Oct: +26.5%). Mining provided additional support, driven by an improvement in LNG (-12.5%; Oct: -17.6%).
• Capital goods imports surged +56.8% YoY (Oct: +51.6%), reaffirming sustained investment momentum led by data-centre expansion, with positive spillovers to job creation and services exports over the medium term.
• The positive export prints in recent months reinforce our view that trade momentum remains intact in 2025. We revise our full-year 2025 export growth forecast upward to +6.0% YoY (previously +4.2%). Looking ahead, we project 2026 export growth at +4.8%.
• Reflecting the stronger export outlook, we raise our 2025 GDP growth forecast to +4.7% YoY (previously +4.5%) and our 2026 GDP growth forecast to +4.3% (previously +4.1%).

Economic Update
Mon, 15 Dec 2025 06:42 am
Malaysia Industrial Production - Cautious optimism as tariff risks ease  

• The Industrial Production Index (IPI) rose further by +6.0% YoY in October (Sep: +5.7%), exceeding market expectations of +5.3%, led by stronger manufacturing output.
• Export-oriented cluster recorded another strong month, supported mainly by E&E products.
• While near-term tariff concerns have eased, we remain cautiously optimistic on the manufacturing outlook in 2026, given spillovers from the existing 19% US tariff on Malaysian goods and potential US semiconductor tariffs.
• The strength in manufacturing points to a solid 4Q25 GDP print and an upside to our current 2025 GDP forecast of +4.5% YoY, potentially closer to +4.8%.
• For now, we maintain our manufacturing growth projection of +3.9% YoY in 2025, before easing to +3.4% in 2026. Our GDP forecasts are kept at +4.5% for 2025 and +4.1% for 2026.

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