Rakuten: FBM KLCI to rebound to 1,800 by 2020

Rakuten: FBM KLCI to rebound to 1,800 by 2020

PETALING JAYA: Rakuten Trade Sdn Bhd, an online equity broker stated that FTSE Bursa Malaysia KLCI (FBM KLCI) to close at 1,630 by the end of this year.

Speaking to reporters here today on the 2019 Market Outlook today, Head of research Kenny Yee said they foresee the index improving to 1,750 by next year based on the 16.0x market price-earnings ratio (PER).

“Following a negative growth this year, we expect corporate earnings to fare better in CY20 with a growth of 5.8%.

Speaking to reporters here today on the Malaysian stock market outlook, Yee said Malaysia blue-chip stocks are under-owned by foreign funds and USD to hover between RM4.10/15 level this year and strengthen to RM4.00 by next year.

He said the stable interest rate could attract foreign funds inflow amid widening yields regional peers. Attractive interest rates differential between Malaysia and regional peers should encourage the inflow of foreign funds thus the spillover effect on equities.

“Countries like Thailand, Indonesia and the Philippine do interest rates. Their government bond also comes down. So that means our interest rate is more attractive.

“That’s why our traders come in and buy our government bond. Money interest rate plays an important role and hopefully there is no interest card in Malaysia and maintain for next year,” he said.

Meanwhile, commenting on the Malaysia economy growth, Yee said that the construction and services industry fuels more outcomes compared to the rest.

He added that the impact of these two industries gives greater flexibility to hedge positions for investments and adds volume to boost the economy.

“For me, Malaysia’s economy so far is doing good which I think the consumer’s segment use to be the main driver for economic growth.

“Even though constructional is not huge, but the effect is very big for the economy. Let say if the project started to work you can see the positive result and the revenue that affects our country,” he said.

By Fifi Harteeny Marzuki

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