Bursa Malaysia is enjoying one of its best years in well over a decade. The key bellwether index, the FBM KLCI, was up more than 15% in the first eight months of 2024 before retracing slightly at the start of September amid global market weakness. That was its strongest gain since 2009 to 2010, when the market recovered from the steep decline in 2008 (at the height of the global financial crisis).
Notably, the current rally is concentrated on large-cap stocks that make up the FBM KLCI, fuelled by foreign fund inflows. Mid- and smaller-cap stocks, on the other hand, have underperformed since peaking around mid-July. The FBM KLCI gains also coincided with a strong turnaround in the ringgit, from having fallen to the weakest against the US dollar since the Asian financial crisis in February to becoming one of the best-performing currencies so far this year (see Chart 1).
