Bursa Malaysia snapped its three-day winning streak on February 24, closing lower amid profit-taking after recent gains and tracking Wall Street losses. The FTSE Bursa Malaysia KLCI (KLCI) eased 3.97 points or 0.23% to close at 1,754.01 from the previous close of 1,757.98. The index opened lower at 1,755.99, reached a high of 1,756.00, and dipped to a low of 1,747.51 before settling. Trading volume was moderate, with decliners outpacing gainers, reflecting cautious sentiment ahead of potential global policy shifts. KLCI futures also ended lower, with the February 2026 contract down 4.5 points to 1,751.5.
Movers and Shakers
The KLCI’s decline was influenced by profit-taking in heavyweights, particularly in consumer and tech sectors, amid broader market caution. Top gainers included:
- AXIATA: Up amid telecom resilience.
- SIME: Rose in industrials.
- GAMUDA: Gained on construction strength.
- PBBANK: Added on banking support.
- Press Metal Aluminium: Showed strength in metals.
Top losers were in healthcare and consumer goods, with IHH and Nestle declining amid profit-taking. High-volume actives featured cyclicals and healthcare plays. Analysts maintain a year-end target of 1,772-1,880 points, supported by reforms and earnings growth.
Policy Changes Impacting KLCI and Malaysia’s Market
Domestically, 2026 is the “year of implementation” under the Madani government, focusing on delivery of fiscal reforms like subsidy rationalisation and tighter spending. The 13MP emphasizes digitalisation, high-value industries, social mobility, and sustainability, with Budget 2026 including SST expansion, e-invoicing, electricity tariffs, dividend taxation, and carbon tax. The New Incentive Framework launches March 1, 2026, tying manufacturing incentives to outcomes. GEAR-uP targets RM120 billion investments by 2028, aiding 4.3-4.5% GDP growth. OPR holds at 2.75% with no changes expected unless shocks emerge. E-waste import ban effective February 2026 disrupts battery recycling but drives higher payables. RON95 subsidy savings projected at RM2.5 billion in 2026.
Globally, US tariffs at 19% on Malaysia pose risks, but exemptions insulate 60% of exports (semiconductors 40%) via the October 2025 US-Malaysia deal. IMF warns of AI hype, geopolitics (US-Iran), and inflation at 3.8%. Fed’s potential pause adds caution, but alliances and trade deals cushion impacts. Global investors bet on Malaysia as a “rising star” amid diversification from US dollar weakness.
Other News Potentially Impacting KLCI or Malaysia’s Market
- Q4 2025 GDP: Expanded at fastest pace in over a year, supported by domestic demand; full data imminent.
- Ringgit Rally: Hits 5-8 year high below RM4/USD, boosting inflows and sentiment.
- Manufacturing PMI: At 20-month high of 50.2 in January 2026, signaling expansion.
- Producer Prices: Fell 2.7% in December 2025, indicating low inflation.
- Export Outlook: 2025 boom cools in 2026 amid tariffs, but E&E, AI, and Visit Malaysia 2026 provide support; risks from sectoral tariffs.
- Sector Themes: AI/data centers reinforce Malaysia as “China+1” hub; renewables M&A grows; sukuk issuance high; industrial leads property market.
- Broader Risks: Geopolitical tensions (US-Iran), Fed pauses, trade frictions, AI hype; but reforms and alliances buffer.
The KLCI shows resilience in early 2026. Reforms drive growth, though global volatility persists.