Despite the resilience of the global economy, 2025 was marked by heightened volatility in global capital markets. In the first half of the year, uncertainties over trade policies and escalating geopolitical tensions weighed on market performance. However, as trade tensions eased and investor optimism strengthened on the back of global artificial intelligence (AI) expansion, benchmark indices in several countries climbed to historical highs. Malaysia’s capital market followed a similar trajectory, with lower trading activity in the first half of the year before rebounding later, supported by resilient domestic economic conditions despite external headwinds. Looking ahead, the domestic capital market is expected to benefit from projected interest rate cuts by major central banks, amid easing inflationary pressures and efforts to sustain growth. This is likely to spur global fund flows into emerging markets, including ASEAN. On the domestic front, the continued realisation of investment projects under national master plans, coupled with supportive policies, strong corporate fundamentals, and ample domestic liquidity, is expected to further strengthen Malaysia’s capital market in 2026.