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Market Highlights
Economic Update
Thu, 12 Feb 2026 07:55 am
Malaysia Labour Market : Positive growth and steady OPR outlook

• The labour market remained resilient in December, with the unemployment rate holding at an 11-year low of 2.9%, consistent with firmer economic growth momentum.
• Stronger tourism flows under Visit Malaysia 2026 are expected to support job creation in services, while a record level of government cash assistance should help lift household spending on essential services.
• Global growth driven by the AI-led technology upcycle should lend further support to export-oriented manufacturing, especially the E&E segment.
• Given sustained improvements in unemployment, we now expect the unemployment rate to average 3.0% in 2026, from 3.1% previously.
• Against the backdrop of a tight labour market and stable inflation, we expect Bank Negara Malaysia to keep the OPR at 2.75% through 2026.

Economic Update
Tue, 10 Feb 2026 07:53 am
Malaysia Industrial Production : Increasingly Positive Outlook for 2026

• The Industrial Production Index (IPI) rose +4.8% YoY in December (Nov: +4.3%), beating market expectations of +4.5%, driven by firmer manufacturing output.
• The export-oriented cluster posted another strong performance, supported mainly by E&E, while the domestic-oriented cluster held steady at +4.9% YoY (Nov: +4.9%).
• An improving global backdrop amid the AI-driven tech upcycle, coupled with resilient domestic demand, should continue to support Malaysia’s manufacturing sector.
• We remain cautiously optimistic as global trade dynamics stay fluid, with the AI tech upcycle, intermittent trade tensions, potential semiconductor tariffs and the pending US Supreme Court ruling on tariff legality among the key moving parts.
• We keep our GDP forecasts at +4.7% YoY for 2025 and +4.3% for 2026 for now. That said, recent domestic indicators suggest upside to our growth forecast. 

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.

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