The expected economic recovery, the availability of the Covid-19 vaccine and the company's re-entry growth will boost the FBM KLCI Bursa Malaysia to 1,700 next year, according to MIDF Research.
In a statement issued by the research firm as quoted by Bernama as saying, the latest developments show the prospect of a brighter capital market in the near future.
Factors such as adequate liquidity, no unwanted shocks on the actual quality of the banking system assets and positive general election results will boost investor sentiment in the country and the region.
The research firm also expects the commodity-based sector to show improvement.
"Global commodity prices are forecast to be better than this year's level, and we project Brent crude oil prices at an average of US $ 51 per barrel and crude palm oil at RM2,700 per tonne," he said, adding that the Malaysian economy is projected to grow 7.0% year-on-year on 2021.
The firm also noted that on November 30, the FBM KLCI closed at 1,562.71 points, recording a loss of -1.6% for 2020 to date.
"However, this covers the fact that it is a very uncertain year. At the height of the panic caused by the Covid-19 pandemic and other obstacles, the FBM KLCI fell to its lowest level on March 19 to 1,219.72, a decrease of 23.2% from the beginning of this year, "he said.
This adds that when the FBM KLCI level this year compared to the close on November 30, Bursa Malaysia showed a 28.1% increase.
MIDF Research said the Malaysian stock market also saw an outflow from the beginning of the year to date of RM24.02 billion.
"Given the current global situation, this matter is acceptable.
"In terms of months, foreign outflows peaked in March as the global investment community was shocked by the declaration of Covid-19 as an outbreak by the World Health Organization (WHO)," he said.
However, the research firm said outflows have declined since then, and it expects foreign inflows next year especially with the recent rise of the Malaysian Ringgit.
