FBM KLCI seen to hit 1,800 by year-end

KUALA LUMPUR: Bursa Malaysia is expected to hit the 1,800-point-level by year-end, lifted by a potential rebound in corporate earnings expansion after three years of no growth, said Maybank Investment Bank (IB) Bhd head of retail equities, Lim Chee Kiong.

He said the core earnings of the FTSE Bursa Malaysia KLCI’s component stocks were forecast to grow 7.3% this year and 7.9% in 2018.

“Apart from that, the local bourse will be supported by a rally ahead of the 14th General Election (GE), which is due by August next year, and Budget 2018 to be tabled on Oct 27,” he said after Maybank IB’s workshop on market outlook for the second half of this year.

Historically, he said there would be a little bit of run-up pre-GE and all the way to the announcement of the GE date, after which there would be a slight dip before recovering to perform again.

Asked on the participation of foreign investors, he said the fund flow reported a net buy for the first seven months of this year and followed by net sell for a month.

Foreign inflow was back in black, with year-to-date foreign fund amounting to RM 10.8bil compared with foreign outflow of RM 3.1bil.

“We can expect some balancing by the investors after that. However, it will have a minimal impact on the bourse,” he added.

On the national gross domestic product growth, Maybank IB expected a full-year growth of 5.5%.