KUALA LUMPUR: The FTSE Bursa Malaysia KLCI (FBM KLCI) is likely to breach the 2,000 points level by end-2015, following positive external factors, says vice president and head of retail research of Affin Hwang Capital, Datuk Dr Nazri Khan Adam Khan (inset).
Speaking to reporters here today, Nazri said the movement of the key index next year would be lifted mainly on implementation of the Asean Economic Community (AEC), strong US economic growth and recovery in the Eurozone.
“The 10-member Asean with a 700 million population will merge into a loose economic pact. It will also be the third largest economic bloc in the world and this is going to be a big boost for Malaysia’s equity market,” he said on the sidelines of a seminar on equity investment.
Nazri expects the FBM KLCI to reach 1,950 by year-end, while in the more immediate outlook, to be at 1,850 next week and ahead of the UMNO General Assembly from November 25-29.
“We will see shares that are politically-connected such as construction, being the focus from about two weeks before UMNO meets and end a month or two after it concludes,” he added.
Nazri said the local equity market would also receive a boost from the release of non-farm payroll data in the US, as well as the loose monetary policy on the part of the European Central Bank and Bank of England.
Benchmark interest rates in the Europe were kept at historic lows after meetings of the policy committees of the European Central Bank and Bank of England on Thursday.
Nazri said the local equity market had grown an average 30 per cent annually since 1977.
As of November 6, its market capitalisation stood at RM1.5 billion, almost double the amount recorded in 2008 at RM780 billion.
Meanwhile, Nazri said Malaysia Airlines would undergo a “very serious transformation” to make the national carrier a profitable entity.
“It is not impossible for MAS to be refloated on Bursa Malaysia in the next three years at a better price of perhaps, RM1.50 or RM2.
“This is because it still has good assets as well as a brand name,” he added.
Yesterday, minority shareholders of MAS approved a proposal for a selective capital reduction and repayment exercise for the company.
As at 4.19pm on Friday, MAS was trading flat at 26.5 sen, with 68.27 million units transacted.– Bernama