KUALA LUMPUR (Sept 20): DBS Group Research has cut its gross domestic product (GDP) growth forecast for Malaysia to 4.8% (from 5.6%) in 2018 and said the Malaysian stock market outperformed regional markets in 3Q18.

In a note today, the research said most of the 6% rally in the Kuala Lumpur Composite Index (KLCI), however, was concentrated in the Banks.

It said the broader Malaysian market remained lacklustre because of disappointing 2Q18 corporate earnings and slower GDP growth.

“We have cut our earnings growth from 9.1% to 5.8% and GDP growth from 5.6% to 4.8% this year following the results. 

“Near term, we believe that the upcoming Budget 2019 in November could disappoint.

“Government spending is likely to be crimped as more debt positions unravel in Malaysia,” it said.