The equity market may continue to face near-term volatility from global economic uncertainties, but investors should remain focused on sectors benefiting from long-term structural growth rather than short-term political developments, according to M+ Global.
In its third-quarter 2026 strategy report, the research house maintained a constructive view on the local market, arguing that while the FBM KLCI has slipped below the 1,700-point psychological level, several sectors continue to enjoy strong earnings visibility supported by domestic policy initiatives and capital expenditure cycles.
M+ Global said investors should adopt a selective investment approach, focusing on companies exposed to technology, power infrastructure, renewable energy, telecommunications and consumer-related themes.
The research house said the upcoming 16th General Election (GE16), widely expected within the next 12 months, is unlikely to disrupt Malaysia’s long-term investment landscape.
It noted that major national initiatives, including the National Energy Transition Roadmap (NETR), New Industrial Master Plan 2030 (NIMP 2030), artificial intelligence (AI) development, data centres and power infrastructure projects, have already been backed by government funding, project awards and ongoing implementation.
“As such, regardless of the election outcome, the capital expenditure pipeline remains largely intact,” it said.
M+ Global added that investors should remain focused on corporate earnings and structural growth instead of election-related uncertainties.=
Weaker Ringgit Supports Exporters
The research house also expects the ringgit to remain on a weakening trend, trading between RM4.06 and RM4.15 against the US dollar after appreciating to RM3.88 earlier this year.
It attributed the currency weakness to the widening interest rate differential between Malaysia and the United States, with the US Federal Reserve maintaining a restrictive monetary stance while Bank Negara Malaysia has kept the Overnight Policy Rate unchanged at 2.75%.
A softer ringgit is expected to benefit Malaysia’s export-oriented technology companies by enhancing earnings competitiveness.
M+ Global noted that Malaysia’s semiconductor industry is also moving beyond traditional assembly operations into higher-value activities such as chip design, citing the recent SkyeChip initial public offering as evidence of the sector’s evolution.
Data Centre Boom Enters Execution Phase
The research house believes Malaysia’s data centre expansion has shifted from planning into execution, creating sustained opportunities across multiple industries.
It highlighted that digital investment approvals reached RM87.4 billion in 2025, driven primarily by AI, cloud computing and data centre projects.
According to industry estimates cited by M+ Global, Malaysia’s total data centre capacity is expected to more than double to 2,055 megawatts by the end of 2026.
Johor remains the country’s key data centre hub, with approximately 850MW already completed, 1,800MW under construction and another 2,700MW in the development pipeline.
Tenaga Nasional Bhd has also signed electricity supply agreements totalling 6.4 gigawatts for data centre projects while significantly increasing regulated capital expenditure to RM42.82 billion.
The research house said this reinforces Tenaga’s central role in supporting Malaysia’s AI-driven infrastructure build-out.
Among its preferred beneficiaries are Time dotCom Bhd, EG Industries Bhd and NationGate Holdings Bhd.
Power Infrastructure and Renewable Energy Offer Strong Visibility
Beyond technology, M+ Global expects companies involved in mechanical and electrical engineering, building materials and cable manufacturing to continue benefiting from rising investment in power transmission and utility infrastructure.
It said the data centre boom has increased demand for supporting infrastructure such as substations, power cables, cooling systems and water supply facilities.
The research house also remains positive on renewable energy following the introduction of the new Solar for Self-Consumption (ATAP) programme this year, replacing the previous Net Energy Metering (NEM 3.0) scheme.
Combined with electricity tariff adjustments, solar adoption has become increasingly attractive for commercial and industrial users, creating sustained demand for renewable energy contractors.
M+ Global identified Solarvest Holdings Bhd and BM GreenTech Bhd as among the key beneficiaries of the energy transition.
Tourism Recovery Boosts Consumer Sector
The report also highlighted opportunities arising from Visit Malaysia 2026, with tourist arrivals reaching 17.5 million in the first five months of the year.
Chinese visitor arrivals have risen sharply following the extension of visa-free travel arrangements, while stronger tourist activity is expected to support consumer spending during the peak travel season.
Consumer-related companies such as 99 Speed Mart Retail Holdings Bhd, Spritzer Bhd and LW Sabah Holdings Bhd stand to benefit from higher demand, with bottled water producers also expected to enjoy improved margins due to easing resin costs as crude oil prices moderate.
Dividend Plays Remain Attractive
Given ongoing global uncertainties, M+ Global continues to favour companies with strong balance sheets, recurring earnings and sustainable dividend payouts.
Among its preferred dividend stocks are Time dotCom, KGB Holdings Bhd and OSK Holdings Bhd, citing their healthy cash generation and defensive characteristics.
Portfolio Rebalanced
For the third quarter, M+ Global has added BM GreenTech, EG Industries, Kobay Technology, Spritzer and Time dotCom to its model portfolio to capture accelerating investment in technology, renewable energy and infrastructure.
It retained exposure to 99 Speed Mart, CBH Holdings, KGB Holdings, MN Holdings, NationGate, OSK Holdings, SCG Bhd and Solarvest, reflecting its continued conviction in Malaysia’s long-term structural growth sectors despite near-term market volatility.
