AI Rout Hits Asia After Nasdaq’s 6% Plunge; Maybank Favours Malaysia as a Defensive Play
StockTipRatings ·
A sharp sell-off in US technology and AI-related stocks spread to Asian markets on November 6, as investors reassessed the outlook for data-centre investment following the US midterm elections. The Nasdaq Composite fell 5.5% on November 5, while the S&P 500 lost 4.4% and the Dow Jones Industrial Average declined 3.4%. The Philadelphia Semiconductor Index tumbled approximately 12.2%.
Asian markets extended the retreat on November 6. In an update published at 12:05 p.m. Malaysian time, Bloomberg reported that the MSCI Asia Pacific Index fell approximately 3%, while Japan’s Nikkei 225 declined 5.3%. South Korea’s Kospi dropped as much as 8.8% during the session, triggering a circuit breaker.
US Politics and AI Policy in Focus
In its strategy report, Maybank’s regional research team had identified US political developments and potential changes to AI and data-centre policy as important variables for the region.
The team highlighted Democratic Party pledges opposing data-centre expansion as a potential source of delays or restrictions on US permits. For Malaysia, the question is whether such policies would alter the AI and data-centre growth outlook outside the US, including ASEAN’s investment inflows and AI-related exports.
Maybank also noted that concerns over profitability, debt and leverage had weakened the AI investment theme, contributing to sharp corrections in North Asian markets. Nevertheless, it retained selective exposure to technology and investment-related opportunities.
Malaysia and Singapore Remain Preferred Markets
Maybank maintained its “Overweight” positioning on Malaysia and Singapore, favouring their relatively defensive market characteristics while awaiting clearer catalysts. It remained “Neutral” on Indonesia, Thailand, the Philippines and Vietnam.
For Malaysia, the team highlighted easing political uncertainty, a fiscally sound Budget 2027 and resilient economic fundamentals. Renewable-energy programmes, investment-related opportunities and potential telecommunications consolidation provide additional support.
Its Malaysia analysis retained a year-end KLCI base-case target of 1,750 points, with a bull-case target of 1,850 points. Maybank maintained its 2026 GDP growth forecast of 5.3%, supported by manufacturing and construction.
Despite these fundamentals, foreign outflows and investor preference for higher-growth markets have weighed on Malaysian equities. Maybank believes this disconnect offers selective opportunities. It also sees potential benefits from regional capital reallocation following MSCI’s proposed reclassification of Indonesia to Standalone status, although this remains a potential development.
Malaysian Stocks in Focus
Maybank’s preferred investment-cycle and renewable-energy exposures include Tenaga Nasional, MN Holdings, Solarvest Holdings, Critical Holdings and ISF Group. Its technology selections include ViTrox Corporation and Pentamaster Corporation.
For longer-term growth and defensive characteristics, the team highlighted IHH Healthcare, Westports Holdings, Nestlé (Malaysia) and SD Guthrie.
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