PETALING JAYA: The equity market is expected to extend gains for the rest of the year, underpinned by resilient economic growth, healthy corporate earnings, sustained foreign direct investment (FDI) into data centres (DCs) and relatively attractive valuations compared with regional peers.
Moomoo Malaysia said while global investors continue to grapple with geopolitical tensions, tariff uncertainties and volatile oil prices, Malaysia remains well-positioned as one of the more defensive markets in the region.
A spokesperson for the online investment platform said the FBM KLCI still has upside potential as the country’s strong macroeconomic fundamentals continue to support investor confidence.
“Malaysia is in a sweet spot. Despite external uncertainties, the economy remains resilient, inflation is well contained, exports continue to perform and corporate earnings are still growing,” the spokesperson said during Moomoo Malaysia’s market outlook briefing.
The spokesperson noted that Malaysia’s gross domestic product expanded 5.8% in the second quarter of 2026, accelerating from 5.4% in the previous quarter due to robust domestic demand, investment activity, electronics and electrical exports, as well as construction works linked to DC developments.
Bank Negara Malaysia is expected to maintain the overnight policy rate at 2.75%, providing a stable interest rate environment for businesses and investors.
Malaysia’s inflation remains another key differentiator. Headline inflation stood at just 1.9% in June, significantly lower than Thailand’s 2.4%, Indonesia’s 3.3% and South Korea’s 3.2%.
“Malaysia is quite fortunate. Thanks to our energy resources and targeted subsidies, we have managed to keep inflation much lower than many neighbouring countries,” the spokesperson said.
The country’s growing role as an artificial intelligence (AI) and DC hub is also expected to underpin market performance.
According to Moomoo, Malaysia has attracted RM144bil worth of DC and cloud-related investments since 2021, with global technology giants including Microsoft, Google, Amazon Web Services, Oracle and Nvidia expanding operations here.
These investments are expected to benefit a wide range of Bursa Malaysia-listed companies, including utilities, water infrastructure operators, construction firms and electrical engineering specialists involved in powering new facilities.
The spokesperson said Malaysia’s corporate sector is less vulnerable to global trade tensions than many regional markets, as approximately 65% of listed companies’ revenues are generated domestically.
“This high domestic anchor shields local listed companies from potential US tariff shocks far better than export-reliant markets such as South Korea and Taiwan,” the spokesperson said.
Despite recent market volatility triggered by the US-Iran conflict, rising crude oil prices and profit-taking in global technology stocks, foreign investors have returned to Malaysian equities in recent weeks, supported by resilient economic data and attractive dividend yields from banking stocks.
On valuations, Moomoo noted that the Malaysian market is trading at around 14.2 times forward earnings below markets such as Thailand and Singapore, while the consensus expects corporate earnings growth of approximately 10% for 2026.
“We still believe Malaysia has upside potential. Investors should focus on sectors supported by structural growth, particularly consumer, construction, AI-related industries and the semiconductor sector, which is seeing renewed momentum from continued global AI capital expenditure,” the spokesperson said.
Looking ahead, Moomoo expects investors to closely monitor upcoming state elections, the tabling of Budget 2027 in October, movements in global oil prices, US monetary policy and geopolitical developments, all of which could influence market sentiment in the months ahead.