Malaysia Stock Market Index: Signs Of An Early Stage Of Bull Market

Malaysia, a Southeast Asian country which occupies parts of the Malay Peninsula and the island of Borneo is well-known for its iconic Petronas Twin Tower, beaches, rainforests and mix of Malay, Chinese, Indian and European cultural influences, just to name a few. Besides that, Malaysia is well-endowed with natural resources such as petroleum, rubber, palm oil, domestic plantations and ore.

Throughout the introduction of the New Economic Policy (1971-90), followed by the National Development Policy (1991-2000), the Malaysian government successfully produced a report card with GDP growth rate of between 4 – 6% annually excluding the 2000 dotcom bubble and 2008 global financial crisis.

As this country’s economic situation matured, making businesses highly competitive, companies, especially MNCs from foreign investment, started to feel the need to cut costs either by layoffs or relocation in order to remain long term profitable. A recent announcement of these famous companies to either relocate or discontinue their operations surely makes the situation a little gloomier than before as an estimated 8,000 employees will be affected.

While this short term knee-jerk reaction looks concerning from a human point of view, InvestingHaven remains neutral to bullish because of two important factors. One, the huge bilateral partnership between China and Malaysia on President Xu Jin Ping’s One Belt One Road initiative will undoubtedly benefit Malaysia economically in terms of infrastructure, connectivity, social facilities, better living standards and abundant business opportunities. Second, the monthly chart of Malaysia’s stock market index, FTSE KLCI index does not paint a bearish picture.

The FTSE Bursa Malaysia KLCI, also known as the FBM KLCI, is a capitalization-weighted stock market index, composed of the 30 largest companies on the Bursa Malaysia (Malaysia Stock Exchange) by market capitalization that meet the eligibility requirements of the FTSE Bursa Malaysia Index Ground Rules. The index is jointly operated by FTSE and Bursa Malaysia.