KUALA LUMPUR, Feb 4 (Bernama) -- Bursa Malaysia erased early gains to end lower today as profit-taking emerged following recent gains. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 5.44 points, or 0.31 per cent, to 1,742.82 from yesterday’s close of 1,748.26. The market bellwether opened 1.84 points lower at 1,746.42, and subsequently hit an intraday high of 1,751.22 in early trade before slipping to its day’s low of 1,740.49 during the mid-afternoon session. In the broader market, losers outpaced gainers 602 to 462, with 558 counters unchanged, 1,013 counters untraded and six suspended. Turnover declined to 2.59 billion shares valued at RM2.86 billion from yesterday's 3.25 billion shares valued at RM3.34 billion.
Summary
UBS expects the ringgit to strengthen towards 3.80 against the US dollar by December, potentially reaching its strongest level in more than a decade. The outlook is supported by strong capital inflows, AI-driven investments, a resilient trade surplus, and narrowing US–Malaysia interest rate differentials.
Key Points
Ringgit target: 3.80 per US dollar by December, last seen in 2015
Best-performing major Asian currency in early 2026, up over 3% YTD
More than 10% gain in 2025, extending its recovery trend
What’s Driving the Ringgit Higher
Sustained foreign inflows from multi-year investments into data centres and the digital economy
Global tech and AI demand expected to remain strong into 2026, supporting Malaysia’s trade surplus
Narrowing interest rate gap as the US is expected to cut rates, while Bank Negara Malaysia is likely to stay on hold
This environment encourages USD-to-ringgit conversions by corporates and attracts yield-seeking investors into Malaysian government bonds
Policy Outlook
Federal Reserve: Potential rate cuts ahead, pressuring the US dollar
Bank Negara Malaysia: Expected to keep policy rates unchanged, supported by strong domestic growth and recovering inflation
Why 3.80 Matters
The 3.80 level hasn’t been seen since 2015, a year marked by 1MDB-related concerns, falling oil prices, and broad US dollar strength
A return to this level would signal a structurally stronger ringgit, backed by fundamentals rather than short-term flows
Bottom Line
UBS sees a clear medium-term upside case for the ringgit, driven by AI-linked investments, stable monetary policy, and supportive external conditions. If these tailwinds persist, 3.80 by year-end is achievable.
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