Kuala Lumpur: Domestic catalysts, particularly the 13th Malaysia Plan (13MP), Visit Malaysia 2026 (VM2026) and a strengthening ringgit environment, are expected to drive the market performance in the first quarter (1Q) of 2026.
This follows a volatile 2025 characterised by "tariff tantrums" and subsidy rationalisation, as well as clearer policy direction after United States president Donald Trump imposed a 19 per cent reciprocal tariff on Malaysian products, said Malacca Securities Sdn Bhd in a research note.
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"The ringgit's strengthening-biased environment is expected to shape market direction. We expect the ringgit to trade within the range of RM3.90 to RM4.10 against the US dollar over the next few months, given expectations of further US rate cuts, which may weaken the US dollar and provide some reprieve for Malaysia's domestic-driven sectors such as consumer, real estate investment trusts (REITs) and banking," it said.
The stockbroking firm highlighted that, under VM2026, Malaysia's tourism sector is projected to be one of the key economic drivers in 2026, with the government targeting 47 million international arrivals and RM32g billion in tourism receipts.
"This should promote and elevate the attractiveness of Malaysia as a premier, sustainable and high-value global destination in the Southeast Asia region.
"We believe this could lift sentiment across the aviation, hospitality, REITs, healthcare and consumer sectors," it said As for the healthcare sector, Malacca Securities said it maintained a positive outlook as Malaysia's ageing population continues to mature, driving demand for healthcare services, retirement solutions and senior-friendly offerings.
"Healthcare providers, pharmaceutical firms and wellness-related businesses present long-term opportunities, particularly in an ageing population environment," it said.
The firm also noted that strategic partnerships between ARM Holdings and Malaysia, alongside the YTL-Nvidia collaboration, have significantly strengthened the country's position in high-value semiconductor and artificial intelligence manufacturing.
"This momentum is expected to drive positive sentiment across the technology sector, particularly benefiting electronics manufacturing services players in Johor.
"Furthermore, the Johor-Singapore Special Economic Zone is poised to serve as a key catalyst for long-term economic expansion over the coming decade," it added.-Bernama
