KLCI market outlook 2023

Will The ‘Feel Good Factor’ Return For The Local Stock Exchange?

According to Rakuten Trade, a certain degree of uncertainty has cleared with the announcement of government cabinet last week.

Mr Kenny Yee, Head of Research at Rakuten Trade together with VP of Equity Research, Mr Thong Pak Leng held a virtual media briefing to recap on the year end market outlook.

“It is promising to note the positive knee jerk reaction on the Ringgit against the USD. We believe the Ringgit will continue to strengthen vis-à-vis the USD especially in 2023 as the Feds ease their stance on rate hikes,” Yee said.

Here are the key highlights of the recap session:

  • the “Feel Good” factor to persist going forward with encouraging signs from foreign funds with the new prime minister expected to instil stronger sentiment on KLCI
  • KLCI may see heighten trading activities as retail participation will improve overtime hence providing the much required liquidity in the market
  • banking and telco sectors to support the momentum this year and into next. This is also premised on the much improved earnings growth for CY23 estimated at 9.7%.
  • the ringgit will strengthen to around the 4.30/35 range by end-2022 and possibly to within the 4.10/20 range next year as we anticipate currency turmoilregionally to be at a tail-end.

Rakuten Trade also touched on the possibility of foreign funds making a return after two years of decline.

“Following consecutive declines in 2020 and 2021, foreign shareholding actually touched the lowest @ end-2021 of only 11.35%. However, the situation improved underpinned by foreign net inflows so far this year.

“Looking ahead, we can only expect foreign shareholding to improve amid improving political climate.”

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