KUALA LUMPUR: Bursa Malaysia's bellwether FTSE Bursa Malaysia KLCI is expected to end  2024 today (Tuesday) on a higher note after being among Southeast Asia's best performing indices so far this year.

As at midday on Monday, the FBM KCLI gained 12.43 per cent year-to-date (YTD), the region's third best.

Singapore's FTSE Straits Times Index topped the list with a 16.79 per cent gain while Vietnam's Ho Chi Minh Stock Index came in second with 12.58 per cent gain.

Other regional indices that charted gains included Laos Stock Exchange which rose 6.55 per cent and the Philippines Stock Exchange Index was up 1.22 per cent.

On the losing end, the Stock Exchange of Thailand lost 0.67 per cent while Indonesia's Jakarta Stock Exchange fell 2.99 per cent.

UOB Kay Hian Wealth Advisors head of investment research Mohd Sedek Jantan said the FBM KLCI has shown consistent growth throughout the year, rising 6.57 per cent in the first quarter, 3.62 per cent in the second quarter, 5.14 per cent in the third quarter and 2.60 per cent in the fourth quarter.

"The strength of the performance is driven by strong corporate earnings and positive economic prospects. Investors are viewing Malaysia's solid economic fundamentals, such as stable gross domestic product growth and supportive fiscal policies, which encourage investment in the local stock market," he told Business Times.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the driving forces that propelled the benchmark index are a combination of external and domestic factors.

Externally, the US Federal Reserve's monetary policy decision was the main driver as markets were expecting them to cut  rates which they did in September despite several rounds of false alarm.

"Domestically, the inflows of foreign direct investment especially on the establishment of data centres has created strong interest in the construction and property sector," he said.

Sedek and Afzanizam expect the index to close the year at a range of 1,640 and 1,650 supported by the return of foreign investors.

"Malaysian equities are fairly undervalued with PE multiples of 15 times is still lower compared to long term average of 17 times. Therefore, there is a clear thesis for foreign investors to acquire Malaysian stocks," said Afzanizam.

Sedek said the push for year-end will be driven by "window dressing activities and the return of traders from year end holidays and Christmas".

For the first week in the new year, he added that the key index will maintain an uptrend momentum with increased local market participation compared to last week.

"We also see the valuation and quality remain attractive compared to regional peers. The US market has touched multiple highs this year. Hence, portfolio managers will shift or trim their allocation from developed to Asia (particularly Malaysia)," he added.

On Monday, the FBM KLCI closed 0.59 per cent or 9.54 points higher to 1,637.68, with select blue chips boosted by window dressing ahead of the year-end.

Among FBM KLCI components, Sedek noted that the majority of stocks displayed a positive uptrend, led by gains in construction and consumer counters.

"This momentum also contributed to sectoral performance on Bursa Malaysia, where only two indices—Bursa Malaysia ACE and Bursa Malaysia Technology—recorded declines.

"The top-performing sectoral indices in today's session were Bursa Malaysia Construction, Bursa Malaysia Properties, and Bursa Malaysia Utilities, the latter driven by optimism surrounding data centre developments," he said. 

https://www.nst.com.my/business/corporate/2024/12/1154724/optimistic-outlook-fbm-klci