24/03/2026

BIZ & FINANCE TUESDAY | MAR 24, 2026

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Strategic investing in shifting landscape A S we look back on 2025, Malaysia’s market resilience stands out despite the global challenges that tested economies worldwide. Despite a tur sheets that don’t get stretched when project awards cluster.

0 Financials — still defensive, but not risk-free Banks can remain a portfolio anchor in 2026 on dividend appeal and relatively stable rate expectations, but the risk conversation matters more next year. If loan growth stays healthy while system liquidity tightens, deposit competition can return, and that becomes a margin story rather than a growth story. So leadership is likely to favour banks with stronger funding franchises, more resilient fee income, and better buffers on asset quality, rather than investors treating the sector as a broad, “buy the-yield” trade. 0 Conclusion: Staying strategic in a shifting landscape Malaysian investors may consider the following strategic actions: 1. Diversify with a “selective exposure” mindset: Rather than going broad-based, lean into sectors with clearer earnings visibility and structural tailwinds — particularly the AI/semiconductor and data centre ecosystem, energy transition enablers, and infra structure/logistics tied to regional connectivity and capex cycles. 2. Stay invested in US with lowered exposure: With tariff policy still a live variable and the added uncertainty around the US Supreme Court ruling on reciprocal tariffs, investors should avoid over-concentration in US sensitive themes, and stay nimble around global risk assets if bond yields and sentiment swing sharply. 3. Be more deliberate with export-heavy positions: ART improves near-term trade visibility, but investors should watch trade composition, rules-of-origin scrutiny, and supply chain cleanliness. A stronger ringgit can be a confidence signal, but it also raises the bar for exporters, favouring names with pricing power, resilience in margins, and higher-value export positioning. 4. Use safe-haven assets with intent, not fear: Gold’s 2025 strength reinforces its role as a hedge. In 2026, it may be less about chasing upside and more about using it selectively to cushion portfolio volatility during policy or geopolitical shocks. 5. Stay anchored on macro + policy signals that drive flows: Malaysia’s improving fiscal trajectory (deficit projected 3.8% in 2025 to 3.5% in 2026) and continued FDI momentum, including RM91.1 billion in approved investments under JS-SEZ in 9M’25, strengthen the medium-term investment case, but leadership in equities will still be shaped by execution, earnings delivery, and liquidity conditions. Ultimately, 2026 is unlikely to reward “spray and-pray” investing. The advantage should sit with investors who stay disciplined, employ a more active approach to investing and position around themes where Malaysia is gaining real traction — while keeping one eye firmly on external policy risk that can reprice markets quickly. *The contents herein do not constitute an offer, solicitation or recommendation to invest in any capital market products. Investors are advised to read and understand the contents of the relevant disclosure documents before investing. A copy of disclosure documents is available on moomoo trading application. Investors should understand the risks involved in relation to the products and services, conduct their own risk assessment and seek professional advice, where necessary. Investors should compare and consider the fee, charges and costs involved. This article is contributed by Moomoo chief market strategist SEA, Isaac Lim (pix).

bulent year, the FBM KLCI held its ground, navi gating geopolitical tensions, trade disruptions, and a shifting global economic landscape. While we saw initial forecasts suggesting a downward trend for 2025, Malaysia managed to close the year on a hopeful note, showing remarkable resilience. 2025 opened with a KLCI value of 1641.32 points, dropping as low as 1,386.63 points on April 9, and as we approached the end of the year, it ended at 1680.11 points on Dec 31, demonstrating the market’s vibrancy and investor confidence. Key global and regional events impacting Malaysia’s economy 0 US tariffs and Asean relations Trade tensions shaped sentiment in 2025, but ART gives Malaysia something valuable going into 2026: near-term visibility on trade conditions. That reduces the “policy shock” discount investors often apply to export markets. The key is to look beyond the headline and focus on who benefits. ART should be most supportive of higher-value, better-compliant export segments (where reliability and traceability matter), while low-margin, cost driven exporters remain more exposed if tariff ambiguity returns, especially around rules-of origin and supply chain scrutiny. At the same time, ART could gradually lift US imports into Malaysia, which may narrow the trade surplus over time, so investors should watch trade composition – not just the headline number. With global GDP expected to slow slightly in 2026, projected at 2.6%, and Asean integration deepening, the 2026 approach is likely to reward selective exposure: companies tied to regional connectivity and capex cycles (infrastructure, logistics, energy enablers), and businesses with clearer earnings visibility, stronger pricing power, and cleaner supply chains. 0 The supreme court’s ruling on Trump’s tariffs A key event to monitor in 2026 is the US Supreme Court’s ruling on the constitutionality of Trump’s reciprocal tariffs. If the court deems the tariffs unconstitutional, the US could face a potential repayment of US$100-140 billion, which would significantly shake the US bond market and have ripple effects across global financial markets, including Malaysia. While the outcome remains uncertain, this decision has the potential to disrupt investor sentiment and global trade flows. For investors, this uncertainty presents potential risks, especially those with significant exposure to the US market. Should the US Treasury face a large scale repayment, it could trigger market corrections, affect US bond yields, and influence the stability of other asset classes. Investors should remain cautious with US based assets, particularly in sectors highly sensitive to tariff changes. It may be wise to diversify away from overexposure to US markets or consider safer, less volatile sectors and regions until further clarity emerges from the ruling. 0 Malaysia’s fiscal health and economic performance Malaysia’s fiscal discipline continues to improve, with the fiscal deficit projected to decline from 3.8% in 2025 to 3.5% in 2026, in line with the 13th Malaysia Plan (13MP). This signals a commitment to fiscal responsibility, boosting investor confidence in the country’s economic stability. Subsidies on diesel and RON95 are expected to help keep inflation in check, further supporting economic health. With GDP growth forecasted at 4% to 4.5% in 2026, Malaysia offers a solid growth outlook. This steady fiscal trajectory and stable growth make the country an attractive destination for

ringgit’s strength should also attract foreign direct investment in 2026, further supporting Malaysia’s market growth. Sectors to watch in 2026: Key growth areas and vulnerabilities 0 AI, semiconductors, and the data centre ecosystem In 2026, the investable AI story in Malaysia is less about hype and more about who actually earns from the build-out. The clearest earnings visibility sits in the “picks-and-shovels” chain — higher value-add semiconductor segments and the wider data centre ecosystem that benefits from committed capex, from industrial infrastructure and power solutions to cooling, engineering services, and fibre connectivity. The playbook is simple: prioritise companies with credible order books, margin discipline, and repeatable demand, rather than names that are merely “AI-adjacent” in branding. However, fears stocked by sentiment could very well dampen any meaningful gains as investors increasingly move towards forward looking guidance rather than factual earnings. 0 Energy transition winners — and the enablers behind them 2026 is likely to reward energy names tied to execution, not headlines. Beyond renewable developers, the more consistent compounding often sits in the enablers: grid readiness, interconnection, power infrastructure, and efficiency solutions that support higher electricity demand from industry and data centres. Where this becomes investable is when projects shift from announcement to delivery — so investors should anchor on pipeline maturity, offtake visibility, regulatory clarity, and balance-sheet capacity, instead of chasing the loudest thematic narrative. 0 Infrastructure, construction, and logistics — integration as a multi-year theme With 2026 acting as a “bridge year” under policy priorities and regional integration tailwinds, infrastructure-linked names can see a steadier flow of work — especially where earnings are tied to connectivity and capacity building across logistics, industrial infrastructure, and repeatable project execution. But this is still a sector where the real differentiator is cash conversion, not contract wins. The better setups are companies that can turn tender momentum into visible cash flows, with disciplined project risk, manageable working capital, and balance

foreign investment, particularly in sectors such as infrastructure, financials, and renewables. Malaysia’s resilience in the face of global challenges is a strong selling point, giving investors confidence in the country’s ability to weather external shocks while maintaining solid domestic growth. 0 Asean’s role and foreign direct investment (FDI) The regional shift towards economic cooperation has benefitted Malaysia, particularly through the Asean Economic Integration and JS-SEZ initiatives. In the first 9 months of 2025 alone, the JS-SEZ initiative has already attracted RM91.1 billion (US$28.6 billion) in approved investments. These investments in manufacturing, services, renewable energy, mining, and infrastructure are set to drive Malaysia’s economic growth in 2026, expected to create about 152,766 job opportunities and increasing its global competitiveness. Additionally, should the US Fed continue their easing cycle, this would keep the USD softer. In turn, local currencies within the emerging market region will stand to benefit, drawing increased capital inflows into the region. 2025 surprises: Gold and the ringgit 0 Gold: A safe haven amidst global uncertainty Gold was one of the top-performing assets in 2025, rising by 63% year-to-date as of Dec 18 as investors sought stability amid global uncertainties. With geopolitical and trade tensions, gold became a go-to asset for safety. Though the price may not rise as aggressively in 2026, it is expected to maintain its strength as a hedge against potential market volatility. 0 The ringgit: A resilient currency in 2025 amid global pressures The ringgit faced pressure in the early months of 2025, dropping against the US dollar as geopolitical tensions escalated. However, as the US Federal Reserve cut interest rates from 4.3% to 3.6%, Malaysia’s OPR remained stable at 3% as the economy was performing, providing support for the ringgit and attracting foreign inflows. By Dec 31, the ringgit had strengthened, ending at 4.04 against the US dollar and 3.14 against the Singapore dollar. This rebound is expected to benefit Malaysia’s exports, particularly in sectors like Electrical & Electronics (E&E) and Digital Infrastructure, which are sensitive to US trade tariffs. The