Strategy Note /
Malaysia

MY : Strategy - It’s a wrap for December; what’s next?

    Ivy Ng Lee
    Ivy Ng Lee

    Head of Malaysia Research, Regional Head of Agribusiness

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    CGS-CIMB
    4 January 2022
    Published byCGS-CIMB

    The KLCI rose 3.5% mom in Dec 2021 to close at 1,568 pts, thanks to window-dressing activities and the government’s decision to extend foreign source income tax exemption and reinstate a higher stamp duty cap on share transactions. The monthly average trading value for the market fell 31% mom and 62% yoy in Dec 21 to RM2.04bn. KLCI had in the past 10/43 years posted -1%/+1.4% mom on average in Jan. We expect investors to tread cautiously in 2022F due to potential headwinds in the form of new Covid-19 waves (Omicron), foreign fund outflows due to Fed taper, and corporate earnings risks due to higher taxes and political risks. Key events to watch out for in Jan 2022: Monetary Policy Committee Meeting on 19-20 Jan, US Federal Open Market Committee (FOMC) meeting on 25-26 Jan, and flooding risks in key states in Malaysia.