Corporate Malaysia's Q2 earnings likely to be damp squib
PETALING JAYA : Investors hoping for better second-quarter (Q2) earnings from listed companies will likely be left high and dry as Corporate Malaysia is expected to continue the underperformance of Q1 2025.
Maybank Investment Bank (Maybank IB) said the upcoming Q2 results season may be muted, reflecting challenges from external uncertainties, particularly the ongoing US-Malaysia tariff negotiations.
'The Q2 results season may yet be another unexciting one but at least one with fewer earnings downgrades,' it said in a strategy note.
The research house forecasts a modest 2.5% earnings growth for the FBM KLCI this year, primarily weighed down by the banking sector. However, it anticipates a stronger rebound in 2026 with a projected growth of 7.7%.
It has a base case target of 1,660 points for the FBM KLCI, pegged to 14.4 times 2026 estimated price-to-earnings ratio (PER).
'Our base case assumes further de-escalation in trade tensions and favourable outcome from tariff negotiations,' it added.
Some bright spots
Despite the softer external environment, Maybank IB said there are 'bright spots' to be found.
It noted Malaysia's domestic economic fundamentals appear encouraging, pointing to robust consumer activity, a sustained investment cycle, and signs of resilient private demand as cushioning the impact of weaker exports.
The economy grew at 4.5% in Q2, slightly faster than the 4.4% year-on-year growth in Q1 as resilient consumer demand offset weaker exports.
This suggests a steady growth momentum and indicates external headwinds due to US tariffs are being mitigated by domestic tailwinds, it noted.
Maybank IB said investors should watch out for weakness in the technology sector. Banks are 'unlikely to yield much surprise' even as it watches for lower loan growth.
However, it expects some positive momentum for construction, healthcare, property, and more selectively, the oil and gas, and utilities sectors.
It said most plantation companies would be weaker quarter-on-quarter due to lower crude palm oil prices, though some could book gains from disposal and forex exchange movements.
Consumer and real estate investment trusts are expected to be softer, after a seasonally strong first quarter.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Malay Mail
10 minutes ago
- Malay Mail
Penang postpones water tariff hike to July 2026, chief minister confirms
GEORGE TOWN, Aug 1 — The Penang government has deferred the implementation of a new water tariff by nearly a year, delaying the scheduled hike from this month to July 1, 2026. Chief Minister Chow Kon Yeow said the adjustment, which falls under the Second Implementation Period (TP2) of the Tariff Setting Mechanism (TSM), had initially been set to take effect today. 'The one-year postponement is expected to benefit 715,957 water users in Penang,' Chow said in a statement issued today. Under the revised tariff structure, the average increase for 79.88 per cent of domestic users — or 613,660 households using up to 35 cubic metres of water monthly — will range between RM0.30 and RM2.55 per month. For non-domestic users, 95.38 per cent of the state's 98,155 commercial consumers using up to 200 cubic metres per month will see their bills rise by RM3.60 to RM35.70 monthly on average. Chow said the revised tariff is expected to generate an additional RM20 million in revenue for Perbadanan Bekalan Air Pulau Pinang (PBAPP) over a six-month period in 2026. 'These funds will be used to upgrade the state's overall water supply services,' he said, adding that details of the projects would be announced in due course. In previous coverage, Malay Mail reported that the new tariff had been approved by the National Water Services Commission (SPAN) as part of a nationwide rationalisation to ensure the financial sustainability of water operators. PBAPP had said the last tariff review in Penang was over 10 years ago and that the proposed adjustment was necessary to support infrastructure upgrades and rising operational costs. Consumer groups and Opposition politicians had raised concerns about the impact on lower-income households, with some urging the state government to delay implementation or offer targeted assistance. In response, Chow had said the state would consider ways to cushion the effects on vulnerable groups — a position now reflected in today's announcement.
Malay Mail
10 minutes ago
- Malay Mail
JB City Hall to offer up to 80pc discount on traffic fines ahead of 68th National Day, starting Aug 15
JOHOR BAHRU, Aug 1 — Johor Bahru City Hall (MBJB) is offering discounts of up to 80 per cent on traffic and parking fines in conjunction with the 68th National Day celebrations. In a statement, MBJB said the offer, which runs from Aug 15 to 31, is intended to encourage the public to settle outstanding fines. 'The 80 per cent discount applies to fines issued from 2016 to December 2024. For fines issued in 2025, a 60 per cent discount will be given in line with our standard rate,' it said. Payments can be made through various channels, including the MBJBSpot app, MBJB service counters, MBJB payment kiosks, e-Khidmat app and the PBTPay portal. MBJB urged residents to take advantage of the offer and clear any outstanding fines before the promotion ends. — Bernama
Malay Mail
10 minutes ago
- Malay Mail
In historic first, DAP MPs attend Zahid-led TVET briefing at Umno HQ
KUALA LUMPUR, Aug 1 — More than 30 DAP MPs visited the Umno headquarters in a rare display of cross-party cooperation, in what Kota Kinabalu MP Chan Foong Hin called a sign of growing maturity in Malaysia's political landscape. The group attended a briefing on technical and vocational education and training (TVET) earlier this week at Menara Dato Onn, led by Deputy Prime Minister and Umno president Datuk Seri Ahmad Zahid Hamidi. The visit marked the first time such a large number of DAP lawmakers had set foot in the headquarters of their one-time political adversary. Reflecting on the visit, Chan said on Facebook that the gesture reflected the unity government's commitment to working across party lines. 'We are working to overcome ideological and party differences for the sake of national progress. Nation-building requires unity, not uniformity — and that's the spirit we're committed to,' he wrote. Based on a group photo from the event, the DAP leaders who attended the briefing included party secretary-general Anthony Loke, adviser Lim Guan Eng and vice-chairman Chong Chieng Jen. Also seen were Umno vice-president Datuk Seri Johari Ghani and secretary-general Datuk Asyraf Wajdi Dusuki. Chan also described the event as one of several key developments this week that signal the government's direction, including the tabling of the 13th Malaysia Plan by Prime Minister Datuk Seri Anwar Ibrahim and a revised US tariff rate that could benefit Malaysian exporters. The unity government, he acknowledged, was 'not perfect' — but he stressed that its leaders were serious about fulfilling their responsibilities. 'PMX has proven that his strategy works — and it's time we continue to stand behind him,' Chan added, citing the tariff revision as a sign of the prime minister's steady diplomacy paying off. DAP and Umno, once fierce rivals, now share power under the Anwar-led unity government formed after the 2022 general election.
