Stock market in Bursa initiates with a decline as investors scrutinize upcoming 13th Malaysian Budget and Federal Reserve indicates potential pause in interest rate hikes.
Headline: FBM KLCI Treads Cautiously Amid Anticipation of 13MP Announcement
The Malaysian stock market showed a mixed performance on Wednesday, with the FTSE Bursa Malaysia KLCI (FBM KLCI) closing at 1,524.50. The index gained 25.87 points, but the Financial Services Index saw a decline of 56.71 points.
Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng stated that investors are awaiting the 13th Malaysia Plan (13MP) announcement, scheduled to be tabled by Prime Minister Anwar Ibrahim in the Dewan Rakyat today. The 13MP, a five-year development blueprint that will chart the nation’s economic direction from 2026 to 2030, is expected to have a positive but nuanced impact on the FBM KLCI.
The 13MP allocates RM611 billion for development, with RM227 billion earmarked for economic growth sectors. This substantial allocation signals government commitment to fostering economic expansion, a move typically welcomed by equity markets, including the FBM KLCI.
The plan focuses on addressing challenges such as cost of living, wage growth, demographic transitions, environmental degradation, and climate change. Investors value such forward-looking and socially inclusive policies as they support long-term economic resilience.
The 13MP’s goals of strengthening governance, accelerating nation-building, reinforcing patriotism, and fostering unity may reduce socio-political risks, often a concern in emerging market stocks like Malaysia’s FBM KLCI. Reduced political risk or social unrest typically has a positive effect on market sentiment.
However, the projected slower GDP growth of 4.5% to 5.5% p.a. for 2026-2030 might temper exuberance among investors. This slower growth outlook might impact corporate earnings projections, which in turn could affect stock prices.
Public and private sector investments are planned to be balanced, with substantial government-linked company contributions and public-private partnerships fueling development. This diversified investment approach may be seen as prudent by market participants, potentially supporting sustained capital inflows into the Malaysian equity market.
Key stocks that saw movement include ITMax System, which rose 10 sen to RM4.05, IHH Healthcare, which gained seven sen to RM6.70, and Dutch Lady Milk Industries, which rose 10 sen to RM27.30. On the other hand, MMM Group dropped 4.5 sen to 1.5 sen, Pharmaniaga slipped half a sen to 15.5 sen, and Pestec International fell 1.5 sen to 13.5 sen.
In the broader market, a total of 277 counters were unchanged, 1,926 untraded, and 53 suspended. The FBM Emas Shariah Index rose 11.09 points to 11,485.11, while the FBM Emas Index shed 7.20 points to 11,428.33. The FBM 70 Index gained 25.87 points to 16,515.57, and the FBMT 100 Index slipped 8.23 points to 11,190.47. The Energy Index climbed 4.11 points to 747.82, and the Industrial Products and Services Index eased 0.12 of a point to 160.77.
Turnover stood at 198.38 million shares worth RM78.92 million. Notable gainers included Zetrix AI, which added two sen to 86.5 sen, and PPB, which climbed 11 sen to RM9.42.
In the coming days, the market's focus will remain on the 13MP announcement, with Thong Pak Leng expecting the FBM KLCI to trend between the 1,520 and 1,530 range today, with no clear catalysts. The initial market reactions might cautiously factor in the moderate GDP growth outlook and implementation risks inherent in large-scale plans. Over the medium term, as reforms advance and economic benefits materialize, the FBM KLCI could experience improved performance aligned with the plan’s objectives.
- Anwar Ibrahim, the Prime Minister of Malaysia, is expected to have a positive impact on the FBM KLCI with the announcement of the 13MP, as the plan allocates a substantial amount for economic growth sectors like finance and investing, which are closely related to business.
- The 13MP's focus on addressing challenges such as cost of living, wage growth, and climate change, along with the balanced public and private sector investments, may support long-term economic resilience and potentially attract sustained capital inflows into the Malaysian equity market.
- Despite the potential positive effects of the 13MP on the FBM KLCI, the slower GDP growth outlook for 2026-2030 might affect corporate earnings projections and stock prices in the short term, causing the market to trend cautiously in the immediate days following the announcement.
