'Pre-election malaise' holding back Malaysian stocks

THE Malaysian economy is all fired up, and the ringgit has recovered from being Asia's worst-performing currency in 2016 - but the local bourse is having none of that fun as evinced by its relatively limp showing.

Last year, the FBM KLCI index - the Malaysian stock market's key barometer - was the worst performer among its Asian peers, second only to China's Shanghai Composite. The key index managed a 9.5 per cent gain for 2017 but it was a clear underperformer against the high double-digit gains enjoyed by regional counterparts such as the Philippines, Indonesia, Singapore, Hong Kong and South Korea, to name a few. When measured in US dollar terms, the regional gains were higher but Malaysia's ranking - 69th out of 106 world stock exchanges, based on Bloomberg data - stayed pat.

Such a shame indeed, especially during a banner year for global equities that was fuelled by a pick-up in the global economy, corporate profits and commodity prices, and thanks in a big part to an overflowing monetary punch bowl.