KUALA LUMPUR, Dec 16 (Bernama) -- Bursa Malaysia extended its positive performance, closing higher for a fourth consecutive session, supported by improving local market sentiment underpinned by a firm domestic macroeconomic backdrop. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 4.59 points, or 0.28 per cent, to 1,648.31, from Monday’s close of 1,643.72. The index had opened 0.95 of a point lower at 1,642.77, and moved between 1,636.50 and 1,648.71 throughout the trading session However, on the broader market, decliners beat gainers 699 versus 408. A further 520 counters were unchanged, 1,149 untraded and 12 suspended. Turnover rose to 2.59 billion units worth RM2.27 billion from 2.50 billion units worth RM2.16 billion on Monday.
Key Takeaways
• Malaysia’s 2Q earnings season came in better than feared, prompting analysts to lift KLCI targets.
• RHB Research raised its year-end KLCI forecast to 1,620 points, citing fiscal support, ringgit strength, and easing tariff risks.
• CIMB Securities flagged resilient dividends and sectoral growth in REITs, plantations, transport, and gaming despite aggregate earnings pressure.
• MBSB Research maintained a 1,650-point KLCI target, pointing to inexpensive valuations and potential foreign inflows as Fed rate cuts resume.
Equities
The FBM KLCI has rebounded nearly 13% from April lows during the peak of global tariff uncertainty, trimming its year-to-date decline to about 3%. RHB Research raised its year-end KLCI target to 1,620, underpinned by fiscal and monetary measures, robust domestic liquidity, and stronger ringgit inflows. Bloomberg data shows the consensus bottom-up target has also improved, now at 1,767 points compared with 1,751 previously.
CIMB Securities described the latest results season as “slightly positive.” While aggregate earnings were revised lower, more companies outperformed expectations compared with the previous quarter. REITs, plantations, transport, and gaming posted year-on-year profit growth, while oil and gas, electronics manufacturing services, and technology registered the steepest declines. Notably, 20% of companies under CIMB’s coverage raised dividends, signalling resilience in shareholder returns.
Macro & Policy Drivers
Domestic markets have largely priced in tariff-related risks following earlier volatility, analysts said. RHB pointed to stronger policy clarity, coupled with improving liquidity conditions, as a key support for equities into year-end. The expectation of a US Federal Reserve rate cut in September could also draw foreign funds back into regional emerging markets, providing an additional boost.
Banks, the heaviest sector in the KLCI, largely reported results in line with expectations. However, analysts expect softer quarters ahead as lower policy rates compress net interest margins. Fiscal support measures and household cash aid may offset some of the pressure by sustaining private consumption, though sentiment remains cautious.
Outlook
MBSB Research maintained its KLCI year-end target at 1,650 points, highlighting positive macro performance and relatively inexpensive market valuations. Analysts expect sustained foreign interest in Malaysian assets as clarity on tariffs improves and global monetary policy turns more accommodative.
Investor View
The conclusion of a resilient earnings season has improved confidence in Corporate Malaysia. With external risks easing, sectoral rotation evident, and dividends ticking higher, the KLCI appears well-positioned to sustain its recovery. Risks remain in policy execution and global demand, but foreign inflows tied to Fed easing could support a stronger finish to 2025.
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