In its reveiw of economic development in ASEAN, Malaybank has noted that Malaysia's economic landscape continued to impress, with 2Q24 real GDP growth accelerating to 5.9% year-on-year, up from 4.2% in 1Q24, marking a strong 1H24 growth of 5.1%.

This uptick Maybank said prompts an upgrade in GDP growth forecasts for 2024 to 5.2% from the previous 4.7%, with expectations for 2025 remaining at 5.1%. The improved outlook is underpinned by robust investment and construction activities, buoyed by ongoing infrastructure projects such as the East Coast Rail Link and the Pan Borneo Highway. The consumer sector also benefits from a proposed 15% salary increase for civil servants, expected to drive higher consumer spending. Notable changes in stock ratings include an upgrade for YTL Power to BUY, reflecting easing concerns over earnings and Wessex's return to profitability. Conversely, Frontken's earnings disappointment results in a downgrade to HOLD. ITMAX receives an upgrade as well, following contract wins for smart city projects, including a MYR540 million deal for additional CCTV installations.

As for other parts of the region, Singapore's 2Q24 GDP growth, while slightly slower than 1Q, is expected to strengthen in the latter half of the year, supported by a surge in July non-oil domestic exports, indicating a rebound in global electronics demand. The equity market's focus is on selective stocks in sectors like Gaming, Industrials, and Internet. AEM and FEH face downgrades to SELL and HOLD respectively, due to weak results and margin pressures, while SEA's target price is raised following strong 2Q performance. PROP is also downgraded due to falling private home sales.

Indonesia's fiscal outlook is solid, with a credible 2025 GDP growth target of 5.2% and a fiscal deficit target of 2.5%. However, the Rupiah's rally may face challenges, and domestic political tensions could impact sentiment. Despite recent strong market rallies, a cautious approach is recommended, especially with potential profit-taking. Commodity stocks, particularly nickel mining operators, are suggested for accumulation. The consumer sector faces regulatory risks from proposed sugar taxes, while MTEL and MAPI remain top picks for their growth potential in mobile networks and retail.

Thailand's SET Index is poised for recovery following the removal of political uncertainties with Paetongtarn Shinawatra's appointment as Prime Minister. Economic growth is anticipated to strengthen from 3Q24 onwards, with a significant portion of the FY24 budget already disbursed. The 2Q24 GDP growth of 2.3% year-on-year reflects improvements in tourism and public spending. The Bank of Thailand's decision to maintain policy rates supports economic stability. Upgrades in tourism stocks are highlighted due to attractive valuations, while SAWAD is upgraded to BUY based on its improving loan growth strategy. SAT and CPNREIT face downgrades due to disappointing earnings and limited upside, respectively.

The Philippines sees a notable increase in the PSEi, driven by strong GDP growth of 6.3% in 2Q24, buoyed by domestic demand and public consumption. The Bangko Sentral ng Pilipinas cuts its policy rate, signalling potential further reductions. The corporate earnings season has been favourable, prompting adjustments in the "Magic 8" picks, with CNPF upgraded to BUY due to strong earnings momentum and a positive outlook.

Vietnam's economic recovery is supported by easing FX pressures and strong 2Q24 corporate earnings growth. The VN-Index's recent gains may lead to profit-taking, but long-term prospects remain positive, with expectations for an upgrade to emerging market status in 2025. Key stock picks include banks, consumers, and tech stocks, reflecting optimism about Vietnam's market and economic trajectory.

Source: Maybank
Title: ASEAN+ FORTNIGHTLY