KUALA LUMPUR, 3 December 2025 — Malaysia’s equity market is poised to transition from a post-pandemic recovery phase to a broad-based growth cycle in 2026, underpinned by structural reforms, resilient domestic participation and major national initiatives such as Visit Malaysia Year 2026 (VMY2026) and the continued rollout of energy-focused infrastructure projects, according to CGS International Securities Malaysia Sdn. Bhd. (“CGS MY”).
The firm provided an early preview of its upcoming Navigator Report 2026, outlining how Malaysia’s chairmanship of ASEAN, Budget 2026 priorities and the implementation trajectory of the 13th Malaysia Plan (13MP) will shape market performance in the year ahead.
Malaysia’s Leadership in ASEAN Strengthens Economic Narrative
CGS MY noted that ASEAN remains a “global beacon of stability,” with Malaysia emerging as a credible economic and diplomatic leader in navigating global trade frictions, U.S.–China strategic rivalry and heightened regional political sensitivities.
Market confidence has been reinforced by the government’s measured approach to international relations and pragmatic responses to geopolitical shocks. Reflecting this, trade volumes and value on Bursa Malaysia have stayed resilient, driven more by local investors than foreign flows.
The market rebounded convincingly following tariff-driven volatility earlier in the year, with the FBM KLCI recovering to 1,619.63 points and the FBM Emas reaching 11,818.32 points, signalling renewed momentum heading into 2026.
Constructive View on 2026: Calmer External Headwinds, Stronger Domestic Tailwinds
Khairi Shahrin Arief Baki, Chief Executive Officer-designate of CGS MY, said the firm remains constructive on Malaysia entering 2026:
“Malaysia continues to stand out as a safe haven amid global uncertainties. With a supportive policy environment, high-growth-high-value sector focus, and strong domestic investor base, our outlook for 2026 is firmly positive.”
Khairi said Malaysia is well-positioned to retain its top spot in ASEAN for IPO listings and fundraising, with seven additional IPOs queued for the remainder of 2025, pushing total listings to 59 for the year.
Investor interest is expected to intensify in 2026 as the Securities Commission’s upcoming reforms to Main and ACE Market listing rules potentially unlock new pathways for fast-growing companies to tap capital markets.
External Conditions Turning Supportive
CGS MY highlighted several global shifts that will support Malaysian assets:
- US–China trade tensions are easing, reducing the risk of supply-chain disruptions.
- The U.S. has revised its reciprocal tariffs lower, cutting Malaysia’s rate from 24% to 19%.
- Over 60% of Malaysia’s exports to the U.S. will be exempt from these tariffs, one of the highest exemption ratios in ASEAN.
- The U.S. Federal Reserve’s rate-cut cycle resumption combined with Bank Negara Malaysia’s likely hold on the OPR into 2026 will narrow rate differentials and support the ringgit.
Historical trends indicate that such dynamics are typically market-positive for Malaysian equities, particularly for exporters, consumer-facing stocks and domestic cyclicals.
Domestic Reforms Fueling Investment Momentum
CGS MY emphasised that Malaysia’s investment trajectory is built on a “foundation of stability.”
Under the MADANI administration, reform efforts, including subsidy rationalisation, revenue diversification, and fiscal consolidation, have yielded tangible results:
- Fiscal deficit narrowed from 5.5% (2022) to an estimated 3.8% (2025), with further improvement to 3.5% (2026) expected.
- Strategic masterplans under the MADANI Economy umbrella, including NETR (National Energy Transition Roadmap) and NIMP 2030 (New Industrial Master Plan), have positioned Malaysia as an attractive location for FDI in high-value sectors.
This has driven record-breaking investment approvals:
- RM379 billion in 2024, the highest in Malaysia’s history.
- RM285 billion recorded in the first nine months of 2025 alone, a 13.2% YoY increase, keeping the country on track for another record year.
Tourism & Consumer Sectors Poised for a VMY2026 Lift
With Malaysia targeting 31 million tourists and RM147.1 billion in receipts under VMY2026, CGS MY expects:
- A two-year CAGR of 19% in arrivals,
- A two-year CAGR of 20% in tourism receipts,
relative to 2024.
Sectors poised to benefit include:
- Aviation
- Consumer retail
- Healthcare services
- REITs with malls and hotels
- Hospitality and leisure counters
Notably, the recently listed Aquawalk Group Berhad is highlighted as “a promising proxy to the VMY2026 thematic play,” given its tourism-aligned portfolio and growing visitor-services footprint.
Renewed Focus on Energy & Infrastructure
CGS MY underscored that energy-linked infrastructure developments, particularly those tied to NETR, will be a major structural theme in 2026, reinforcing Malaysia’s positioning as a Southeast Asian hub for renewable energy transition, grid modernisation and industrial decarbonisation.
These themes are expected to anchor Malaysia’s multi-year growth story, supporting sustained demand in:
- power-utilities,
- engineering services,
- industrial solutions,
- logistics and transport networks.
