Analyst: Malaysian stock market may rebound after volatility in the third quarter

Glonghui June 18｜Affin Hwang IB analysts stated in a report that uncertainties surrounding the US-Iran conflict and the upcoming state elections have cast a shadow over Malaysia's stock market prospects for the third quarter. However, they remain cautiously optimistic, believing these concerns will ease and support a recovery in the fourth quarter. They indicated that the prospect of US interest rates remaining high for a longer period, along with renewed outflows of foreign capital, is expected to keep the market volatile in the short term. They believe that market performance in the second half of the year will be driven by three key factors: sustained investment growth and infrastructure upgrades; state elections, which serve as a barometer of the political climate; and new institutional capital inflows to companies under the government’s corporate value enhancement plan. Affin Hwang maintains an “overweight” rating on the Malaysian market and keeps its KLCI target for the end of 2026 unchanged at 1,780 points.