Stock market may soar next year riding on GE15

By ZAIDI ISHAM ISMAIL
editor@dagangnews.com

KUALA LUMPUR Dec 29 – Malaysia’s stock market which is choppy right now may rebound next year riding on the 15th general election.

Analysts said if the prime minister calls for the dissolution of Parliament next year, the stock market is sure bound to be on an upward trajectory.

"Traditionally, the stock market of Bursa Malaysia will be on an upward trend ahead of the polls.

If elections are called, the market will rise and now is the time to accumulate shares," said a fund manager attached at a government-owned institutional investor.

Datuk Seri Ismail Sabri Yaakob's mandate is due to end by 2023 and the general elections can be called as early as next year.

An analyst at Maybank Securities meanwhile said if next year is an election year, the stock market will definitely strengthen.

"The ruling government will definitely offer a slew of incentives and promises to attract voters and investors.

Thus, it could be a boon for the stock market next year," the analyst told DagangNews.com.

He added investors' confidence will improve as almost 100 percent of the country's adult population is vaccinated.

However, not all analysts agree that the stock market will recover next year.

An analyst expects the market to be choppy next year mainly because COVID-19 is not over yet leading to a roller coaster global economy.

"Although the pandemic has been reared somewhat, the battle is not over yet as its variants can emerge at any time.

Furthermore, the global economy's performance hinges on how the virus is contained.

"Thus, I expect the stock market to be volatile next year reaching as high as 1,600 points and dipping as low as 1,300 points," said the analyst.

But the investors of FTSE Bursa Malaysia Kuala Lumpur Composite Index cannot be blamed entirely.

The market also reacts to the domestic local economy which is equally colourful and full of surprises," a fund manager told DagangNews.com.

Rakuten Trading Sdn Bhd head of equity Thong Pak Leng said the stock market will also brace for the impact of Cukai Makmur next year.

"The stock market's performance will hinge on economic recovery as well as the corporate earnings," he told The Edge.

Top picks include government-linked firms, semiconductor companies, rubber glove firms and online firms.

The bane of the stock market will continue to be spearheaded by aviation stocks and tourism related stocks. – DagangNews.com