KUALA LUMPUR (May 7): Malaysia’s FBM KLCI climbed to a two-year high on Tuesday as gains of consumer and banking stocks extended the benchmark index’ rally to its fourth straight day.
The KLCI rose as much as 12.93 points or 0.8% to 1,610.32, its highest since May 5, 2022. The index closed at 1,605.68, still up 8.29 points or 0.52%, with 24 out of 30 constituents posting gains. MR DIY Group (M) Bhd was the top gainer in the index, rising 4.1% to RM1.77.
The gains also propelled Malaysian stocks’ market capitalisation to RM2 trillion in for the first time ever.
The gains appear sustainable and on track to hit 1,755 by the end of this year, CGS International said. The aggregated 12-month target for the KLCI stands at 1,683 points, Bloomberg data showed.
“We continue to advocate paying more attention to domestic-driven sectors, as we feel the domestic economy is picking up with improved growth in both private consumption and gross fixed capital formation,” its head of research and strategist Chehan Perera told The Edge.
For strategy, CGS likes banks, construction, utilities, real estate investment trusts, conglomerates, healthcare and telecoms, he added.
Investors also bet on small-cap stocks, pushing the index to its highest since October 2014, and Bursa Malaysia's Mid 70 Index also gained though ACE Market stocks edged lower.
Overall market breadth was positive, with 684 counters advancing and 455 retreating, while 498 were unchanged after 5.42 billion shares worth RM3.79 billion changed hands on Bursa Malaysia.
Most sectoral indices were also in positive territory, led by utilities such as Ranhill Utilities Bhd, which surged 16% to RM1.38.
UOB Kay Hian's head of research Vincent Khoo believes that further upside will come from foreign inflows with anticipated rate cuts by the US Federal Reserve.
Further, geopolitical risks would likely dissipate after the US presidential election that will take place in November this year, he flagged.
The research house prefers commodities such as palm oil, oil and gas, and industrial metals, betting on a commodity price boom driven by global supply chain disruptions, weather disruptions and the restocking of strategic reserves in China and the US.
UOB Kay Hian also likes technology stocks in view of the anticipated recovery in the electronics manufacturing services and semiconductor-related sectors.
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Malaysian stocks’ market capitalisation reaches historical high of RM2 tril
Edited ByJason Ng
