FBM KLCI To Test 1,730 Level This Year - Rakuten Trade

KUALA LUMPUR, Jan 16 (Bernama) -- Rakuten Trade Sdn Bhd anticipates the FTSE Bursa Malaysia KLCI (FBM KLCI) to test the 1,730 level this year, based on 16 times price-earnings ratio on 2025 earnings growth. 

Its head of research Kenny Yee said that based on similar valuation on 2026 estimates, the index should hover around the 1,860 threshold. 

“As for the ringgit, we believe the local currency is currently undergoing some normalisation and expect it to trend in the 4.30-4.40 range (against the US dollar) on the back of the stubborn interest rates in the United States (US) for 2025,” he said. 

During the ‘2025 Market Outlook Media Briefing: Stairway To Heaven’  webinar today, Yee warned of potential surprises from the US due to its numerous headwinds, particularly the US Federal Reserve’s rate cut, high bond yield, high debt ceiling, and high valuations, which may create ripples in the global market.

“For the first half of 2025 (1H 2025), I would say things will remain manageable, provided that US President-elect Donald Trump does not take any unexpected actions.

“Wall Street is currently being supported by its ample liquidity. As such, we advise investors to be vigilant on the heightening volatility possibly by 2H 2025, especially when sentiments begin to turn against the US’ perpetual high rates,” he added. 

In 2024, Malaysia saw prominent foreign direct investments (FDIs) from the US, Europe, and China, mainly in the technology and green technology sectors, with investments totalling approximately US$17 billion or RM80 billion. 

Meanwhile, the recently launched Johor-Singapore Special Economic Zone (JS-SEZ) would be the much-required booster for future FDIs, he said.

Yee noted that the ringgit had also strengthened versus the US dollar, from a low of 4.80 to the current 4.50, while corporate earnings in Malaysia are expected to have grown by around 17 per cent in 2024.

In 2025, earnings may experience sustainable growth of nearly 10 per cent, while in 2026, a commendable 7.1 per cent growth is anticipated, underpinned by improvements across the board.

-- BERNAMA