Positive Outlook for Market Liquidity in 2025 with Focus on Unloved Sectors

AmBank Research predicts a balanced approach for Malaysian equities in 2025 after a strong 2024 performance. While market liquidity is expected to remain robust, driven by privatisation activities and rising cash levels, the challenge lies in selecting investments.

The focus will be on undervalued sectors and those with strong structural themes, complemented by strategic stock picking. Top picks include CIMB, Gamuda, KL Kepong, Sime Darby Property, and Vitrox. To enhance accountability, AmBank Research introduces its model portfolio, enabling clients to track recommendations effectivel

Market Liquidity

The analyst expects domestic market liquidity to remain strong in 2025, driven by privatisation activities, increased cash levels (8% of AUM in October 2024), and potential inflows from mandatory EPF contributions for non-citizens (up to RM1.7 billion annually). Prime Minister Anwar Ibrahim’s call for GLICs to prioritize domestic investments could further bolster liquidity.

Key sector recommendations include Technology and Plantations, leveraging supply chain realignments and higher CPO prices. Construction and Property remain attractive due to sustained interest in data centres. Top stock picks include CIMB, Gamuda, KL Kepong, Sime Darby Property, and Vitrox.

AmBank introduced a RM300 million model portfolio with 31 stocks, focusing on value and technology sectors. The portfolio reflects a PE of 17.9x, PB of 1.5x, and a 3.2% dividend yield, aiming to align client investments with measurable benchmarks. The research house also notes a robust IPO pipeline, particularly in healthcare and telecoms, alongside dual-listing applications.

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