KUALA LUMPUR, Dec 12 (Bernama) -- Bursa Malaysia’s key index closed higher today on bargain hunting, in line with positive investor sentiment across regional markets, consolidating at its highest level in more than two months — a level last seen on Oct 2, 2025. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 12.42 points, or 0.76 per cent, to 1,637.81, compared with Thursday’s close of 1,625.39. The benchmark index opened 2.83 points lower at 1,622.56, thereafter edged down to an early low of 1,622.03, before staging an uptrend to an intraday high of 1,640.36 in late trading. Market breadth was positive, with gainers trouncing decliners at 743 versus 387. Another 530 counters were unchanged, 1,108 untraded, and 16 suspended. Turnover increased to 3.09 billion units worth RM2.46 billion from 2.99 billion units worth RM2.35 billion on Thursday. Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng said the FBM KLCI ended higher on continued...
Key Takeaway
China’s regulators are weighing measures to rein in speculative trading after a US$1.2 trillion rally since August. The aim: avoid a repeat of the 2015 boom-and-bust while fostering steadier gains to support the economy.
Proposed Measures (Under Discussion)
Possible removal of certain short-selling curbs.
Tighter monitoring of credit funds used for stock purchases.
Limits on brokerage marketing of round-the-clock account openings.
Warnings to social media platforms to reduce bullish hype and illegal stock tips.
Suspension of abnormally volatile stocks (e.g., Ningbo TIP Rubber halted).
Margin trading restrictions: Some brokers (e.g., Sinolink Securities) raised deposit ratios to curb leverage.
Market Backdrop
Rally Context: Major indexes have surged >20% since April, led by chip and AI-related stocks.
Shanghai Composite: Decade high; CSI 300 also up >20% from YTD low.
Volume Surge: Trading volumes hit ¥3.1T (2nd highest ever, Aug 27).
Margin Transactions: Now exceed 2015 levels, raising bubble concerns.
Investor Flows:
Retail investors opened 166% more accounts YoY in August.
Over 400 mutual funds halted or capped subscriptions.
Smart money (HNWI, corporates via hedge funds) seen as current main driver.
Regulatory Intent
Authorities want “long-term, rational investing”, per CSRC Chairman Wu Qing.
Push for market stability tied to economic revival and consumer confidence.
Stability also politically important around major national events (e.g., Sept 3 WWII anniversary parade).
Risks & Comparisons
Echoes of 2015: Leverage-driven boom still fresh in memory.
Macro Strains: Deflation, property crisis, and U.S. tariff pressure underscore fragility.
Yuan Movement: Offshore yuan slipped after recent rally to strongest level since Nov.
Analyst Divergence:
Citic Securities: Rally driven by strategic sectors and hedge funds, not retail frenzy.
Western Securities: Market may consolidate 2–3 months before resuming rally on household inflows.
Investor Watch
Equities:
Near-term volatility likely as regulators tighten oversight.
AI, chips, and strategic sectors may remain outperformers despite cooling moves.
FX: Offshore yuan could soften if equity rally loses momentum.
Bonds/Flows: Watch for liquidity reallocation from deposits → equities.
Key Risk: Any aggressive clampdown risks triggering a confidence shock reminiscent of 2015.
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