From 2025’s strong gains to 2026’s opportunities
The Edge Malaysia Weekly’s readers were treated to a notable performance in 2025, with our 10 stock picks delivering a 10.3% gain, well above the FBM KLCI’s 3.9% rise. As we close the year, the question on everyone’s mind is: what will drive value in 2026? Our outlook centers on resilience, thematic upside, and disciplined risk management as Malaysia’s economy continues to adapt to global shifts in demand, inflation trajectories, and policy support.
We publish forward-looking stock ideas that align with our overarching investment philosophy: focus on robust fundamentals, sustainable earnings growth, and compelling valuations relative to long-term growth drivers in Malaysia. The 2026 selections emphasize diversification across sectors that historically show resilience and potential upside in a more uncertain global environment.
Thematic anchor: where upside could emerge in 2026
Domestic demand and consumption remain a core pillar for Malaysia. As incomes rise and the middle class expands, consumer-facing companies with pricing power and product differentiation may outperform during slower macro cycles. We look for businesses with strong brands, balanced capital expenditure, and effective cost management that can translate to steady margins even amid inflationary pressures.
Infrastructure and industrials continue to benefit from government-led projects and public-private collaborations aimed at improving connectivity, utilities, and logistics. Companies with solid order books, scalable operations, and prudent balance sheets could gain from recurring revenue streams and the ability to capture efficiencies from consolidation and digitalization.
Financials and fintech remain a core part of any Malaysian equity framework. We favor banks and financial services firms with prudent credit cultures, strong capital positions, and digital-enabled customer acquisition. In the fintech space, select players pushing adoption of digital payments, supply chain finance, and SME lending could complement traditional franchises while offering higher growth potential.
Energy transition and commodities activities, including renewable energy play and materials tied to the green economy, may provide upside as ESG-aligned demand grows. Commodity-linked beneficiaries could also navigate cycles by focusing on efficiency, hedging, and diversified revenue streams.
<h2 Stock-picking discipline for 2026
Quality and valuation drive our picks. We favor companies with clear earnings visibility, strong balance sheets, and the ability to maintain returns through price fluctuations. Diversification across market caps and sectors remains essential to manage risk, alongside a disciplined exit strategy if fundamentals deteriorate.
We also emphasize governance and transparency. In 2026, investors should expect ongoing corporate reforms and a more sophisticated investor education landscape in Malaysia. Our selections aim to reflect these improvements by prioritizing firms with robust governance practices, clear capital allocation plans, and principled risk management.
<h2 How to use our 2026 picks
Use these ideas as a starting point for a diversified portfolio aligned with your risk tolerance and investment horizon. Consider layering entries to smooth timing risk, and complement equity exposure with fixed income or alternatives if appropriate for your goals. Regular reviews, macro-context awareness, and adherence to a disciplined rebalancing plan will help navigate the year ahead.
<h2 A note on origin and context
This article first appeared in The Edge Malaysia Weekly on December 22, 2025 – December 28, 2025. While markets vary, our core philosophy remains: pursuing long-term value with a clear focus on fundamentals, evidence-based analysis, and prudent risk controls.
