Rakuten Trade Targets FBM KLCI at 1,800 Despite Global Uncertainty

KUALA LUMPUR, 17 March 2026 – Bursa Malaysia is expected to remain resilient in Q2 2026 despite ongoing global uncertainties, including Middle East tensions and rising oil prices. Rakuten Trade Research expects the FBM KLCI to reach 1,800 points, based on a 17x CY2026 price-to-earnings ratio.

Corporate earnings in Malaysia are projected to grow 7.9% in 2026, recovering from weaker 2025 results, while 2027 earnings are forecast at 6.5%. Foreign participation has shown positive momentum, with net inflows of RM1.28 billion year-to-date, and foreign shareholding steady at ~19%. Retail participation remains muted at 14.9%, concentrated in blue-chip stocks. The Malaysian ringgit is expected to trade in the RM3.80–3.90 range against the US dollar.

“Markets may remain volatile due to geopolitical and commodity price swings, but Malaysia’s improving earnings outlook and supportive domestic factors should continue to underpin the market,” said Kenny Yee, Head of Research at Rakuten Trade. “In addition, structural themes such as infrastructure development and rising electricity demand driven by data center investments are expected to provide further support for selected sectors of the Malaysian market.”

Sector Highlights

Rakuten Trade maintains an Overweight stance on:

• Banking, Construction, Consumer, Oil & Gas, Plantation, Utilities, Technology – supported by resilient earnings, major infrastructure projects, commodity trends, and rising electricity demand from
  Malaysia’s expanding data center ecosystem.
• Sectors rated Neutral include Auto, Glove, Healthcare, Property, REIT, and Telco, with selective opportunities across the market.

Stock Highlights: Blue-chip picks

• AMMB Holdings Berhad (AMBANK) – improving net interest income, FY26 net profit forecast RM2.12 billion
• CIMB Group Holdings Berhad (CIMB) – FY26 net profit forecast RM8.40 billion, attractive dividend yield
• Gamuda Berhad (GAMUDA) – strong orderbook visibility of RM45.9 billion
• Kuala Lumpur Kepong Berhad (KLK) – resilient upstream plantation prospects
• Tenaga Nasional Berhad (TENAGA) – benefiting from rising electricity demand from data center development

Selected small-cap picks:

• Kerjaya Prospek Berhad (KERJAYA), Inta Bina Group Berhad (INTA), Powerwell Holdings Berhad (PWRWELL)

Global Context

In the US, volatility persists amid high national and household debt, inflationary pressures, and a softening job market. Elevated interest rates may constrain corporate earnings growth.

Hong Kong and China remain relatively attractive. The HSI trades at 12.8x PER, with corporate earnings projected to grow ~10% in 2026. Policy support, including potential RRR cuts and domestic consumption initiatives, may stabilise markets.

Looking Ahead

Rakuten Trade says while short-term volatility is likely, Malaysia’s improving earnings, strong sector fundamentals, and sustained foreign participation are expected to support the market. Investors are advised to remain selective, focusing on companies with strong earnings visibility and exposure to structural growth themes, while balancing opportunities with global risks amid ongoing geopolitical and macroeconomic developments.

Business News

FBM KLCI at 1,800