The FTSE Bursa Malaysia KLCI is a stock market index representing the 30 largest companies listed on the Bursa Malaysia, the main stock exchange of Malaysia. It is a market-capitalisation-weighted index, providing a balanced representation of Malaysia's blue-chip landscape.
In 1986, the KLCI was launched as an open-ended index with 83 companies. However, in 2006, Bursa Malaysia and FTSE Group joined forces to launch the FTSE Bursa Malaysia Index Series.
Today's Chart & Movers
The FTSE Bursa Malaysia KLCI has performed much like many other global indices over the past few months, with a sharp pullback in early August (although it has since recovered). However, the index started a strong run higher in June 2023. Nevertheless, it is still some way off its 2018 highs.
FBMKLCI Daily Movers
Bursa Malaysia KLCI Forecast
Whether you’re investing in stocks, bonds, or other assets, it’s crucial to weigh both the upside and downside potential. For the FTSE Bursa Malaysia KLCI, here’s what you should keep in mind:
The Bull Argument: Malaysia's robust economy, driven by factors such as its strategic geographical location, diversified industries, and government initiatives, are bullish factors supporting the KLCI. Furthermore, the country's commitment to economic liberalisation and foreign investment has attracted significant capital inflows, supporting the growth of its stock market. Additionally, Malaysia's strong domestic consumption and increasing exports to key markets have contributed to its economic resilience. These factors should also help the KLCI. In June, HLIB Research raised its year-end KLCI target to 1,700 points from 1,630 points and said it anticipates earnings growth of 7.1% and 4.7%, respectively, for fiscal years 2024 and 2025.
The Bear Argument: While Malaysia's economy has shown resilience, it is not immune to global economic challenges, as we have seen with the recent pullback. Factors such as geopolitical tensions, trade disputes, and fluctuations in commodity prices can impact the KLCI. Domestic issues, such as inflation, unemployment, and political uncertainties, can also pose risks to the Malaysian economy and its stock market. In late February 2024, analysts at AMInvest maintained a Hold rating on the FTSE Bursa Malaysia KLCI ETF, citing the “potential impact of uncertain macroeconomic headwinds arising from global recessionary pressures and inflationary trends, compounded by the timing of the US Federal Reserve's interest rate adjustments for the year could lead to significant revisions to corporate earnings projections.”
The KLCI serves as a benchmark for the Malaysian stock market, offering investors a way to gauge the performance of Malaysia's leading corporations.
The index encompasses ten sectors of the Malaysian economy, including finance, plantations, energy, construction, and technology, reflecting the Malaysian economy's diverse nature.
FBMKLCI Top 10 Companies
The index is reviewed every six months in June and December. The review is conducted by the FTSE Bursa Malaysia Index Advisory Committee.
| Company | Market Cap (End Aug, 2024) |
|---|---|
| Malayan Banking | $28.90 Billion |
| Public Bank BHD | $20.37 Billion |
| CIMB Group Holdings | $19.31 Billion |
| Tenaga Nasional | $18.49 Billion |
| Telekom Malaysia | $6.04 Billion |
| Press Metal Aluminium Holdings | $9.68 Billion |
| IHH Healthcare | $12.77 Billion |
| MISC | $8.77 Billion |
| Petronas Gas | $8.28 Billion |
| YTL Corp | $8.00 Billion |
Top 5 Constituents
The Appeal Of The FBMKLCI
The FTSE Bursa Malaysia is a suitable investment for investors seeking exposure to Malaysia's growing economy and its diverse sectors. Here are some characteristics that align well with the KLCI:
Malaysian Economic Exposure: Investors looking to gain exposure to Malaysia's dynamic economy, driven by sectors such as financial services, IT, and manufacturing and production, will find the KLCI an attractive option.
Malaysian Financials Stocks: Financials stocks are well represented within the index. Investors with a preference for financials may find the FTSE Bursa Malaysia KLCI attractive.
Diverse Sector Exposure: The index does include companies from various sectors of the Malaysian economy, offering investors diversification benefits.
Dividend Income Seekers: Many of the constituents of the KLCI pay dividends to shareholders. As a result, investors who prefer dividend stocks might see the KLCI as an attractive option.
Long-Term Growth: Malaysia has been named one of the fastest-growing economies in Asia. The country's stable political environment, favourable demographics, and government initiatives aimed at promoting economic growth position the KLCI for long-term growth.
Indices – Daily Movers