FTSE Bursa Malaysia KLCI (FBM KLCI) should move into recovery mode on positive technicals, eyeing 1,512-1,528 targets next, predicts a local equity research outfit.
In a note this morning (Jan 26), HLIB Research attributed this to the index mirroring another record close on Dow in light of the US soft landing chorus and cooling inflation, which would lead to the US Federal Reserve’s expected pivot (March: 50%, May: 59%, June: 100%) coupled with China’s stimulus measures.
Its optimism was ‘well-cushioned’ on a number of grounds, including regulators’ assurance that Bursa Malaysia’s fundamentals remain sound following the recent domino effect in perceived warehoused stocks’ meltdown (affected stocks’ constituted less than 0.5% of the total market capitalisation).
It also attributed the optimism to favourable domestic leads (i.e. NETR, NIMP2023, reinvigoration of developments in Johor, rising FDI momentum, the return of foreign investors).
Another factor listed in the repot was the rising risk appetite for the under-owned Bursa Malaysia (with foreign shareholding hovered at all time low of 19.5% in Dec 2023) amid undemanding KLCI’s CY 2024 P/E at 13.4x (vs 10Y mean 17.2x)
On Wednesday, the KLCI rose 7.99 points to end the day at 1,504.1 from Tuesday’s close of 1,496.11. — TMR
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