KLCI outperforms FTSE STI

FTSE Bursa Malaysia Kuala Lumpur Composite Index (KLCI) has outperformed Singapore's FTSE Straits Times Index with a strong rally observed from 2008 to 2019. KLCI has proved to be resilient across major financial crises, especially during the 1997 Asian financial crisis (AFC) and 2008 global financial crisis (GFC). While it was badly hurt during the 1997 crisis, the index rebounded strongly in 1998 and broke the 1,000-point mark by early 2000.

It subsequently entered into a correction phase and rebounded at 550.00 thereafter. The GFC was not much of a concern to the index, with the fall of 720 points a smaller extent compared to the 1,027-point fall in 1997. Fast forward to 2020 when the Covid-19 pandemic caused the index to fall by a mere 405 points as compared to previous crises.

As a developing nation, Malaysia experienced exponential growth in its economy during the 1970s. This marked the primary phase of the wave count for its stock index. During the 1980s, we witnessed a series of prolonged running flat corrections till 1986, which marked the first and second wave of the cycle wave. The critical third wave, which was from mid-1987 to 1993, reflected the success of Malaysia's highly industrialised economy.