KUALA LUMPUR: The FTSE Bursa Malaysia KLCI (FBM KLCI) is expected to hover around the 1,600 mark in 2024, supported by resilient economic growth, improving corporate earnings, and attractive valuations, according to Interpacific Asset Management.
Its chief economist and fund manager Datuk Dr Nazri Khan foresees the FBM KLCI trending around 15 times the market price-to-earnings ratio (PER), in line with the consensus range of 14.7 times to 15.2 times.
He noted that the performance in January 2024 also earmarked the third consecutive month of positive closing from the index, indicating a sustainable upward trend.
"With the FBM KLCI looking more attractive than its regional peers, especially in terms of earnings valuation, we are expecting a much more resilient performance in 2024.
"In addition, the lacklustre movement of the index in 2023 could provide a more attractive proposition to global investors especially when more big-cap companies in Malaysia have registered better than expected earnings in the last few quarters," Nazri told Bernama.
Internally, he added that the focus would be more on corporate earnings, gross domestic product growth and government initiatives.
Nazri also expects corporate earnings to grow by a healthy pace of between 10 per cent and 12 per cent in 2024, with the major contributors expected to come from the technology, construction, property and finance sectors.
He said the construction sector could benefit from government infrastructure projects with public-private partnerships expected to support the sector, potentially accelerating project completion.
"The financial sector will be supported by low-interest rates and rising credit demand, while the technology sector will be driven by digitalisation initiatives and increasing tech adoption.
"Meanwhile, continuous demand for affordable housing will bolster the property sector," he said.