KENANGA INVESTMENT BANK BERHAD 22 INTEGRATED ANNUAL REPORT 2025 Even as these domestic fundamentals remain supportive, the global operating environment is characterised by heightened uncertainty. Geopolitical tensions remain elevated as conflict in the Middle East continues to drive volatility, with developments around the Strait of Hormuz and broader regional dynamics pushing energy price higher, weighing on risk sentiment, and causing disruption to businesses. In addition, the pace of China’s economic recovery, ongoing supply chain realignments within ASEAN and broader geopolitical shifts will require careful monitoring. Against this backdrop, sustaining competitiveness while managing potential cost pressures will remain a key focus for local businesses. For financial markets, we anticipate a combination of a stable Overnight Policy Rate of 2.75%, steady domestic policy, and investor confidence to support participation in the local stock market. Following a strong tally of 60 IPOs in 2025, Malaysia’s ability to sustain a vibrant IPO landscape in 2026 will focus on market capitalisation and quality, with an emphasis on attracting larger and higher-quality listings to deepen market breadth and resilience. Sustainability and inclusive growth will remain key priorities. The phased implementation of sustainability reporting standards, including climate risk disclosure, begins in 2026, complemented by anticipated progress on carbon tax policies affecting energy-intensive sectors such as iron, steel and energy. These initiatives are designed to strengthen corporate resilience, support long-term competitiveness and encourage responsible business practices. Against this evolving backdrop, Kenanga Group remains cautiously optimistic about the outlook ahead. Our focus is firmly on execution—strengthening recurring income streams, further optimising cost efficiency across the Group, and continuing to broaden our product offerings to meet evolving client expectations. At the same time, we are placing increased focus on deepening our foothold in the mass affluent segment, while continuing to enhance our digital capabilities across the Group to improve operational effectiveness, client engagement, and scalability. Building on Kenanga Group’s 52‑year legacy in the capital markets, these efforts will reinforce execution discipline and operational resilience, positioning the Group to deliver sustainable, long‑term value for clients, shareholders, and the broader market. Acknowledgements I wish to record my sincere appreciation to our Founder Emeritus and Adviser, YM Tan Sri Dato’ Paduka Tengku Noor Zakiah Tengku Ismail, whose counsel and foresight continue to guide the Group’s long-term direction and values. My appreciation also extends to our Chairman, YAM Tan Sri Dato’ Seri Syed Anwar Jamalullail, and the Board of Directors for their stewardship during a year marked by market uncertainty and heightened competition. Your leadership has been pivotal in reinforcing discipline, strengthening governance and ensuring strategic clarity across the Group. I am equally grateful to my colleagues across all levels of the organisation. In a demanding operating environment, your professionalism, commitment and willingness to adapt enabled the Group to sustain momentum, and progress key priorities for future growth. I would also like to thank our shareholders, clients and business partners for their continued confidence and collaboration. Finally, I would like to thank our regulators and policymakers, particularly Bank Negara Malaysia, the Securities Commission Malaysia and Bursa Malaysia Berhad, whose efforts in strengthening market integrity and inclusiveness provide a vital foundation for industry development. With the collective support of our stakeholders, the Group remains well-positioned to build on its strengths and pursue sustainable growth in the years ahead. DATUK CHAY WAI LEONG Group Managing Director GROUP MANAGING DIRECTOR’S MANAGEMENT DISCUSSION AND ANALYSIS
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