Thu Sep 19 05:47:00 UTC 2024: ## FBM KLCI Expected to Reach 1,780 by Year-End: Rakuten Trade

Kuala Lumpur, [Date] – Brokerage firm Rakuten Trade Sdn Bhd has projected that the FTSE Bursa Malaysia KLCI (FBM KLCI) will close the year at 1,780, exceeding its previous July estimate of 1,730. This optimistic outlook is fueled by strong institutional and foreign interest, positioning Bursa Malaysia as a leading performer in the ASEAN region.

Rakuten Trade’s Head of Research, Kenny Yee, attributed the confidence to a 16.8 times price-earnings ratio based on a projected 16 per cent earnings growth in 2024. The influx of foreign funds, predominantly targeting the top 10 FBM KLCI companies, is considered a key factor in achieving this target.

“The 1,780 level is certainly achievable as we move into the final quarter,” Yee stated during a virtual media briefing on the 4Q outlook.

The FBM KLCI has experienced a surge of 14 per cent year-to-date (YTD), outperforming other regional markets like Vietnam (12 per cent), Singapore (8.0 per cent), and the Philippines (8.0 per cent).

Domestic institutional activity has also been robust, with YTD net inflows reaching RM1.15 billion. Yee anticipates this trend to intensify, further bolstering the local bourse.

He highlighted the positive impact of political stability, strengthening ringgit, and rising foreign direct investment on the market. He also pointed out the significant role of government-linked investment companies (GLICs) in repatriating funds back to Malaysia, creating a solid foundation for growth.

The rebalancing of foreign funds within the ASEAN region, coupled with the easing interest rates regime, has also contributed to the positive outlook. However, external factors such as the Japanese yen’s carry trade debacle and volatile Wall Street performance remain concerns.

While retail participation has remained low due to recent IPO activity and high oversubscription rates, Rakuten Trade remains optimistic. With continued improvement in liquidity from institutional and foreign investors, the firm anticipates a positive impact on the retail segment.

Overall, Rakuten Trade expects a strong 15.4 per cent growth in corporate earnings in 2024, compared to a flattish 1.5 per cent in 2023. The firm is confident about the FBM KLCI’s potential to reach 1,780 by year-end, driven by a confluence of positive factors.

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