Skip to content

Malaysia: Five sectors that are currently in the limelight

KUALA LUMPUR: As the third quarter corporate earnings season kicks off, investors want to know which sector will be the year’s finale

The material shows that a number of significant global events are still affecting the performance of these sectors for the rest of the year. These include high inflation and interest rates, slowing commodity prices, the global energy crisis, and Covid-19-induced supply chain disruptions.

Take a look at what investors can expect from these five key sectors.

1. Oil sector: The outlook for oil and gas service providers is mixed as more upstream players turn to alternative energy sources, and while crude oil prices remain above US$90 per barrel, not all local oil and gas (O&G) companies will see significant growth in core earnings. pre-outbreak spending levels. The oil giants expect domestic activity to increase in the coming quarters.

2. plantation sector: a research report stated that “upstream plantation revenues are likely to decline year-on-year for most growers due to higher production costs resulting from the full impact of the Malaysian minimum wage hike and higher fertilizer prices.”

3. financial sector: three major positive trends for banks were foreseen in the 3Q22 earnings announcement. Banks are expected to widen their net interest margin (NIM) by 6-8 basis points, with strong loan growth of more than 6% by the end of September 2022 and a 40% year-over-year decline in loan loss provisions.
Core net profit of the banking sector will grow 4-5% year-over-year due to NIM and loan expansion.

4. Electronics: Malaysia is one of the leading countries in terms of investment in the semiconductor, telecom and technology sectors because it has a good ecosystem of talent, infrastructure and a business-friendly environment, said in an Oct. 25 report, adding that the semiconductor industry is struggling to cope with export restrictions from the U.S. government, which is increasing pressure on its allies to block shipments to a growing number of Chinese companies from shipping cutting-edge chips, yet Malaysia may seize on spillover effects from Chinese and U.S. industries moving to the region to minimize future risks from rising U.S.-China tensions.

5. Real Estate Sector: While real estate gains remain weighed down by weak buyer sentiment despite the outlook, retail REITs have shown resilience in surviving the pandemic.
While growth may be limited, good management of REITs and the strength of major shopping centers should ensure stable long-term growth.

Published inInvestment InformationReal Estate InvestmentStock Investment

Be First to Comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Skip to toolbar