Hong Leong Investment Bank indicates a "decline followed by rebound" trend for Malaysian stocks, with Q2 possibly presenting a good buying opportunity

Golden Ten Data reported on April 3 that Hong Leong Investment Bank analysts Jeremy Goh and Felicia Ling pointed out in a report that due to rising geopolitical risks, the depreciation of the Malaysian ringgit, and a narrowing interest rate spread caused by the Federal Reserve delaying rate cuts, the Malaysian stock market may experience temporary weakness over the next two quarters. However, the earnings performance of the FTSE Bursa Malaysia KLCI appears to be largely unaffected by the initial impact of the Iran conflict, with the banking, utilities, healthcare, and telecommunications sectors all demonstrating strong defensiveness. Among the KLCI component stocks, plantation, PETRONAS Chemicals, and Press Metal are expected to receive positive support; while the construction sector, consumer goods industry, and PETRONAS Dagangan may face headwinds. The analysts expect the market to regain momentum later this year, and the current level is seen as an ideal accumulation opportunity. Hong Leong Investment Bank maintains its target of 1,790 points for the KLCI by the end of 2026, with top picks including CIMB Group, Tenaga Nasional, and IHH Healthcare.