Kuala lumpur: CIMB Securities Sdn Bhd has expressed optimism about Malaysian equities in 2026, attributing this to a projected 6.4 percent earnings growth, a 4.4 percent gross domestic product (GDP) expansion, strengthening of the ringgit, policy catalysts, and the possibility of a pre-16th General Election rally.
According to BERNAMA News Agency, CIMB Securities noted that domestic investors are displaying more enthusiasm compared to foreign investors, who remain cautious regarding Malaysia due to concerns over earnings delivery. The firm highlighted that domestic investors have a more favorable outlook on the market, while foreign investors continue to maintain a relatively low exposure to Malaysian equities. Key issues for foreign investors revolve around the reliability of corporate earnings, which have previously suffered due to higher operating costs, increased taxes, U.S. import tariffs, and ongoing industry challenges.
CIMB Securities emphasized that there has been no significant objection to its 'overweight' rating on the banking sector. Beyond banks, there is notable investor interest in companies like SD Guthrie and KL Kepong due to their land monetization plans and crude palm oil price prospects, IJM following a takeover offer by Sunway, Tenaga Nasional with its tax update, and various property companies experiencing a share price rally due to attractive valuations, as well as Gamuda after a recent dip in its share price.
The firm reported that the FTSE Bursa Malaysia KLCI (FBM KLCI) has increased by 4.25 percent, or 72 points, year-to-date (YTD), reaching 1,752 points, primarily driven by the banking and consumer sectors. As a result, CIMB Securities reiterated its target of 1,772 points. Notably, on January 27, the index reached 1,771.25, surpassing its previous peak of 1,769.16 on October 8, 2018.
Additionally, foreign investors have reversed their stance, becoming net buyers of RM1.4 billion YTD, in contrast to RM22.3 billion in net outflows in 2025. The fourth-quarter 2025 earnings season has also commenced on a positive trajectory.