Malacca Securities: Four Selective Plays to Drive Gains

Market Breadth Softens as Telecoms Outshine

The local bourse traded with negative breadth on September 7, 2026, as 568 losers outpaced 523 gainers, according to Malacca Securities’ market review. PETGAS and SDG dragged the index lower, while the telecommunications sector bucked the trend with a +1.31% gain, led by strength in MAXIS and TM.

The cautious sentiment came ahead of the US August payrolls report, which ultimately delivered a shock to credit-sensitive markets. Nonfarm payrolls surged 162,000 — far above the consensus forecast of 50,000 — triggering bond-yield rallies and expectations of further Federal Reserve rate hikes that weighed on Wall Street.

Four Selective Plays Offering Earnings Visibility

Despite broader market hesitation, Malacca Securities Research identified four stock-specific catalysts worth monitoring across infrastructure, renewable energy and industrial growth. PEKAT remains a beneficiary of Malaysia’s renewable-energy push, with recent stock strength bringing it close to its 52-week high, the research house noted.

KEEMING is supported by an indicative order book of approximately RM246 million and growing exposure to data centre mechanical and electrical works, according to M+ Online’s research team. This positions the company to benefit from Malaysia’s emerging AI infrastructure build-out, a theme expected to drive industrial-services demand through 2027.

LWSABAH offers a more defensive angle following strong FY2026 earnings, underpinned by resilient East Malaysian beverage demand and expanded production capacity. The company’s geographic diversification and brand strength in Sabah and Sarawak provide earnings resilience during market downturns, Malacca Securities noted.

GAMUDA also remains well-supported by its record RM59.6 billion order book and expanding data centre exposure, providing strong earnings visibility, according to the research house. The infrastructure heavyweight’s diversified project pipeline spans transport, water and power sectors, with data centre mechanical, electrical and plumbing works now contributing meaningfully to revenue growth.

FBM KLCI Expected to Hold Above 1,700 Level

Malacca Securities projects that the FBM KLCI is expected to remain supported above the 1,700 psychological level, although buying interest may stay selective amid the cautious broader market backdrop. The research house expects focus to remain on stock-specific catalysts rather than broad index-driven rallies.

On Wall Street, the S&P 500 slipped 0.4% and the Nasdaq fell 0.3% after the payrolls surprise, while the Dow dropped 272 points. Trading will resume Tuesday following the US Labor Day holiday, with institutional attention likely to turn towards S&P Dow Jones Indices’ quarterly rebalancing.

Plantation Weakness and Sector Rotation

The Plantation sector declined 1.64%, the worst performer on the session, as commodity-price pressures and concerns over global growth weighed on palm oil and rubber stocks. This sector rotation mirrors the global shift towards AI infrastructure and data centre plays, themes that Malacca Securities views as secular growth drivers for Malaysian industrial and engineering services over the medium term.

What This Means for Retail Investors

Retail investors tracking the local bourse should note that Malacca Securities’ selective-play approach reflects a shifting market environment where index-level gains are unlikely to be broad-based. Identifying companies with visible order books, renewable-energy exposure and data centre infrastructure exposure offers better earnings visibility than sector-level exposure in plantation or commodity-linked businesses.

The research house’s emphasis on order-book depth — particularly GAMUDA’s RM59.6 billion pipeline and KEEMING’s RM246 million indicative orders — suggests that earnings revisions are more likely to flow from companies with hard-wired revenue visibility. Conversely, defensive plays like LWSABAH suit investors seeking stable dividends over growth, backed by resilient domestic demand in East Malaysia.

The cautious market breadth and sector-specific strength argue against broad-based equity exposure; instead, stock-picking discipline and focus on company fundamentals are likely to generate outperformance in the near term.

Key Takeaways

• Market breadth was negative with 568 losers outpacing 523 gainers on September 7, 2026, reflecting selective buying interest in infrastructure and renewable-energy plays.
• GAMUDA’s RM59.6 billion order book and data centre exposure provide strong earnings visibility, according to Malacca Securities Research.
• KEEMING’s RM246 million indicative order book positions the company to benefit from Malaysia’s AI infrastructure build-out, the research house noted.
• FBM KLCI expected to hold above the 1,700 level, with buying interest concentrated on stock-specific catalysts rather than broad market rallies.
• Plantation sector lagged (-1.64%) while telecommunications (+1.31%) outperformed, signalling ongoing sector rotation away from commodities towards growth infrastructure plays.

Full Report: The complete Malacca Securities research report, “Selective Plays to Drive Local Market Gains” (published September 7, 2026), is available on M+ Online. This article summarises key findings; readers should review the full report for detailed valuations, risk factors and model assumptions.

Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice or a recommendation to buy or sell any security. Ratings and target prices cited are those of Malacca Securities Research and are subject to change. Always do your own research before making investment decisions.

Want access to full M+ Online research reports and AI stock analysis? Contact Dexter Chia, AI-Driven Remisier at Malacca Securities Sdn Bhd. M+ Global Invitation Code: UBZQ | WhatsApp: +60169059789 | Why Choose Dexter?