Quake-readiness a new growth theme for Malaysian construction, insurance stocks—Maybank IB

• Maybank IB said making buildings earthquake-resistant adds 5%-10% to structural costs, but this is a small price to pay compared to the potential damage and losses from a major quake.

KUALA LUMPUR (Oct 7): Maybank Investment Bank (IB) sees rising earthquake awareness in Malaysia as a new growth theme, with construction and insurance stocks set to benefit.

Construction firms are expected to gain from increased demand for quake-resistant buildings and repair work, while general insurers could see higher revenue as more customers seek natural disaster coverage.

In a note on Monday, Maybank IB said Malaysia’s recent 4.1 magnitude quake in Johor and insights from earthquake expert Professor Dr Azlan Adnan serve as a reminder that the country is not immune to seismic risks. Though once believed to be outside the Ring of Fire, Malaysia is exposed to intraplate earthquakes and has several fault lines.

Six states, namely Pahang, Terengganu, Perak, Negeri Sembilan, Sabah and Sarawak, have been identified as areas at risk of earthquakes.

While not all faults are active, the potential for stronger quakes (above magnitude 6.0) is raising concerns about disaster preparedness. Malaysia introduced seismic building codes only in 2017, based on Eurocode 8, and many local by-laws still lag behind national standards.

Maybank IB said making buildings earthquake-resistant adds 5%-10% to structural costs, but this is a small price to pay compared to the potential damage and losses from a major quake.

Gamuda Bhd (KL:GAMUDA) is a top pick in the construction sector, thanks to its experience in earthquake-prone countries like Taiwan and Australia. Its financial year 2025 engineering and construction job wins hit RM22.1 billion, 20% above expectations, boosting its total order book to RM38.4 billion — with 50% from Malaysia, followed by Taiwan (25%), Australia (20%), and Singapore (5%).

In insurance, Allianz Malaysia Bhd (KL:ALLIANZ) is expected to benefit as more individuals and businesses seek natural disaster coverage. Earthquake insurance in Malaysia is usually optional and included in comprehensive fire or “all-in-home” packages, rather than standard policies.

As Penang girds itself towards the last lap of its Penang2030 vision, check out how the residential segment is keeping pace in EdgeProp’s special report: PENANG Investing Towards 2030.