Investors also bet on small-cap stocks, pushing the index to its highest since October 2014, while Bursa Malaysia’s Mid 70 Index also gained. ACE Market stocks, however, edged lower on Tuesday.

KUALA LUMPUR (May 7): Malaysian stocks hit RM2 trillion in market capitalisation for the first time ever on Tuesday, thanks to broad gains in blue chip stocks and a slew of new listings.

The benchmark index FBM KLCI rallied for its fourth straight days to 1,605.68, its highest close since April 8, 2022, led by consumer and banking stocks. So far this year, the KLCI has racked up over 10% gains.

“We have seen foreign investors become net buyers again recently as the US economy is showing signs of slowing down, reviving hope of earlier interest rate cut,” Fortress Capital chief executive officer Datuk Thomas Yong told The Edge. Blue chips with strong fundamentals will likely continue to do well, he noted.

Investors also bet on small-cap stocks, pushing the index to its highest since October 2014, while Bursa Malaysia’s Mid 70 Index also gained. ACE Market stocks, however, edged lower on Tuesday.

Overall market breadth was positive, with 684 counters advancing and 455 retreating, while 498 were unchanged after 5.42 billion shares worth RM3.79 billion changed hands on Bursa Malaysia.

Most sectoral indices were also in positive territory, led by utilities such as Ranhill Utilities Bhd, which surged 16% to RM1.38.

Stocks on the Main Market accounted for 97% of the entire equity market capitalisation, with the ACE Market and LEAP Market making up the rest. All in all, there are 2,315 securities listed on Bursa Malaysia.

Bursa Malaysia has also listed 18 companies so far this year, and most have delivered gains since their debut. This year, Bursa Malaysia aims to host 42 initial public offerings with a market capitalisation of RM13 billion.

By the end of April, 21 of the 31 stocks listed on the Main Market and ACE Market in 2023 have racked up gains of up to 360% from their listing price, according to data compiled by The Edge.

For companies that launched their IPOs this year, only one out of the 13 newly-listed stocks ended April below its IPO price. The remaining 12 IPOs posted gains of up 147% by the end of last month.

KLCI on track to hit 1,755 by year end — CGS International

The KLCI rose as much as 12.93 points or 0.8% to 1,610.32 earlier in the day, its highest since May 5, 2022. As it settled at 1,605.68 on market close, the index was still up 8.29 points or 0.52%, with 24 out of 30 constituents posting gains. MR DIY Group (M) Bhd was the top gainer in the index, rising 4.1% to RM1.77.

The gains appear sustainable and on track to hit 1,755 by the end of this year, CGS International said. The aggregated 12-month target for the KLCI stands at 1,683 points, Bloomberg data showed.

“We continue to advocate paying more attention to domestic-driven sectors, as we feel the domestic economy is picking up with improved growth in both private consumption and gross fixed capital formation,” its head of research and strategist Chehan Perera told The Edge.

For strategy, CGS likes banks, construction, utilities, real estate investment trusts, conglomerates, healthcare and telecoms, he added.

UOB Kay Hian’s head of research Vincent Khoo believes that further upside will come from foreign inflows with anticipated rate cuts by the US Federal Reserve.

Further, geopolitical risks would likely dissipate after the US presidential election that will take place in November this year, he flagged.

The research house prefers commodities such as palm oil, oil and gas, and industrial metals, betting on a commodity price boom driven by global supply chain disruptions, weather disruptions and the restocking of strategic reserves in China and the US.

UOB Kay Hian also likes technology stocks in view of the anticipated recovery in the electronics manufacturing services and semiconductor-related sectors.