Spotlight on Execution of Approved Investments Malaysia’s economic focus in 2026 will shift toward executing previously approved investments, supported by fiscal discipline, a stable ringgit, and improving investor confidence, according to market analysts. PETALING JAYA: Malaysia is set to focus on executing investment projects that received approval in the previous year, as initiatives move from planning to implementation, said Asia Pacific University of Technology & Innovation senior lecturer Dr Ahmad Danial Zainudin. He said this transition is supported by improving fiscal discipline, with the government aiming to reduce the fiscal deficit to 3.5% of gross domestic product, easing pressure on private sector funding. Combined with a neutral Overnight Policy Rate of 2.75%, the macroeconomic environment resembles a “Goldilocks scenario”. Ahmad Danial noted that the ringgit’s resilience, trading below RM4 to the US dollar, has helped contain imported inflation without hurting the competitiveness of electronics exporters. This stability, he said, is attractive to global institutional investors seeking regional safe havens. Private investment has strengthened, growing by more than 12% in recent quarters, as companies proceed with capital spending tied to projects under the 13th Malaysia Plan. He added that improving fiscal metrics could compress Malaysia’s equity risk premium, supporting higher market valuations over time. With GDP growth projected at 4.0% to 4.5%, Ahmad Danial said growth would increasingly be driven by earnings quality rather than headline expansion, as Malaysia moves toward higher-value manufacturing and services. Rakuten Trade head of research Kenny Yee said market participation remained steady, supported by a strengthening ringgit that continues to attract foreign funds. Investors, he said, should prioritise companies with clear demand drivers, resilient margins, and recurring consumption. Manulife Investment Management portfolio manager Nicole Wong said the firm remains neutral on Malaysia heading into 2026, citing limited need for further stimulus and expectations of tighter monetary policy. Meanwhile, senior portfolio manager Kenglin Tan stressed the importance of focusing on companies with strong technological capabilities, solid cash flows, and management teams capable of navigating global risks. Source: SunBiz Published on: January 2, 2026