Bursa Malaysia opened higher on January 26, extending gains amid foreign fund inflows and positive regional sentiment. The FTSE Bursa Malaysia KLCI (KLCI) surged to a seven-year high, closing at 1,744.07, up 24.08 points or 1.40% from Friday’s close of 1,719.99. The index opened at 1,721.63, hit a high of 1,746.98, and dipped to a low before recovering on blue-chip buying. By midday, it climbed 20.41 points to 1,740.40. Trading volume was robust, with gainers outpacing losers, reflecting optimism driven by a strengthening ringgit and easing global trade tensions. The launch of the Mini FTSE Bursa Malaysia KLCI Futures (FKLM) today offers lower-cost entry for retail investors, potentially boosting market participation.
Movers and Shakers
The KLCI’s strong performance was led by blue-chips in telecommunications, healthcare, and banking, amid foreign inflows and tech optimism. Notable top gainers included:
- TM: Up 18 sen to RM7.96 on telecom strength.
- IHH: Rose 11 sen to RM8.60, benefiting from healthcare resilience.
- Maybank: Gained 14 sen to RM11.36 amid banking sector inflows.
- Sime Darby (SDG): Added 5 sen on industrial recovery.
- MR DIY: Increased 8 sen to RM3.90, tied to consumer demand.
Top losers were limited, with plantations easing on CPO price dips to RM4,174 per ton. High-volume actives included 99SMART and cyclicals like Sime Darby. Analysts project the KLCI to reach 1,810-1,850 by end-2026, supported by 8.5% earnings growth and AI-driven investments.
Policy Changes Impacting KLCI and Malaysia’s Market
Domestically, Bank Negara Malaysia maintained the Overnight Policy Rate (OPR) at 2.75% last week, emphasizing resilience amid global risks and supporting market stability. The 13th Malaysia Plan (13MP) accelerates digital and green reforms, with Budget 2026 focusing on SST expansion, e-invoicing, and carbon tax to enhance revenue and ESG alignment. New minimum salary thresholds for employment passes, effective June 2026, aim to boost workforce quality. GEAR-uP targets RM120 billion in investments by 2028, aiding 4.3-4.5% GDP growth.
Globally, US tariff pullbacks on allies like the EU have eased tensions, though 19% tariffs on Malaysia persist with exemptions for over 60% of exports, including semiconductors (40% of total). The October 2025 US-Malaysia trade deal mitigates impacts. IMF forecasts resilient global growth but warns of AI hype and geopolitical risks, with inflation easing to 3.8%. OCBC expects a 25 bps BNM rate cut in H1 2026. A strengthening ringgit to a seven-year high supports equity inflows.
Other News Potentially Impacting KLCI or Malaysia’s Market
- Ringgit Rally: The ringgit hit its highest since 2018 on AI optimism and growth prospects, boosting market sentiment and KLCI performance.
- Economic Data: 2025 GDP reached 4.9%, exceeding forecasts; 2026 outlook remains 4.3-4.5%, driven by exports and domestic demand.
- Sector Themes: AI/data centers reinforce Malaysia as a “China+1” hub; renewables see M&A growth; sukuk issuance hit RM264.8 billion in 2025.
- Broader Risks: Geopolitical tensions and Fed policy pauses add uncertainty, but domestic reforms and multi-market strategies provide buffers.
Overall, the KLCI demonstrates strong momentum in early 2026. Reforms and external tailwinds fuel gains. However, track tariff developments.