PETALING JAYA: Malaysia is on track to register stronger economic growth in the second half of this year (2H24).
This optimistic projection is underpinned by the country’s stable job market, supportive measures from the government, rising inbound investments, continued recovery in the tourism sector and a rebound in the external sector, Hong Leong Investment Bank (HLIB) Research said.
The brokerage noted the positive economic trajectory is expected to bolster the local stock market, with the benchmark FBM KLCI projected to reach 1,700 points by year-end.
In its report yesterday, HLIB Research reaffirmed its view that Malaysia’s gross domestic product (GDP) growth in 2024 would come in at 4.8%, standing at the upper end of Bank Negara’s projected range of 4%-5% expansion for this year.
“The upside surprise showing in the first quarter of 2024 (1Q24) backs our optimism.
“Growth should gain further traction in 2H24, supported by steady employment, supportive income measures, continued tourism recovery, higher investments and exports rebound,” it added.
Malaysia registered a GDP growth of 4.2% in 1Q24, surpassing consensus’ estimate of 3.9% for the period under review.
According to HLIB Research, the local bourse would likely take a temporary breather in 3Q24 after having performed well in 1H24, before resuming its uptrend in the later part of the year when it becomes more apparent that a US Federal Reserve (Fed) rate pivot is coming to fruition, spilling over positively to the ringgit and FBM KLCI.
It maintained its end-2024 FBM KLCI target at 1,700 points based on 15.7 times the estimated earnings for 2024.
“In our view, the next up leg is likely to be driven by the Fed’s long-awaited pivot, which we expect to happen in 4Q24 – after witnessing a series of cooling inflation figures,” HLIB Research said.
