Local Bourse, Foreign Flavour

Asian equity markets are poised to regain prominence amongst global investors in early 2026, as many are rotating away from U.S. assets amid elevated valuations, policy uncertainty and volatile bond yields. 

According to Rakuten Trade Research, Malaysia continues to stand out as regional market momentum strengthens. The FBM KLCI has maintained its upward trajectory, pushing past the 1,770 level as at 27 January 2026, supported by sustained foreign fund inflows and broad-based participation in blue-chip stocks. 

Global Markets: Mixed Performance 

For the week of 19–23 January, global equity markets recorded mixed performances. The Hang Seng Index declined 0.36% week-on-week, despite recovering from early losses, as sentiment remained cautious amid renewed concerns over potential U.S. trade policy tightening. Gains in selected consumer and technology-linked stocks helped cushion the decline. 

U.S. markets remained volatile, pressured by a combination of policy uncertainty, weak U.S. dollar and elevated bond yields. Technology stocks were notably weaker, with Intel shares falling sharply following a weaker than expected outlook. Over the week, the S&P 500 declined 0.35% while the Nasdaq edged lower by 0.06% as the Dow Jones Industrial Average fell 0.53%. 

Malaysia: Benefiting from Foreign Inflows 

In contrast, the FBM KLCI advanced 0.42% for the week, reaching multi-year highs. The rally was driven primarily by strong foreign buying, complemented by steady local institutional participation and encouraging domestic economic data. 

Rakuten Trade Research expects the FBM KLCI to continue trading within the 1,750–1,780 range in the near term. Year-to-date, the index has gained close to 100 points, with foreign fund inflows remaining as the dominant driver of market momentum. 

Q1 2026 Market Outlook – Research Picks 

As part of its first-quarter outlook, Rakuten Trade Research highlights the following stocks: 

Stock price as of 23 January 2026.  

Why Foreign Investors Are Looking at Malaysia 

Several structural factors continue to support Malaysia’s investment appeal: 

• A strengthening Ringgit, appreciating from RM4.50 in January 2025 to around RM3.95 currently, enhances risk-adjusted returns 

• Malaysian equities remain attractively valued despite recent gains 

• Earnings growth is projected to improve to 7.1% in 2026 from 1.3% in 2025 

• Global portfolio rotation away from U.S.-denominated assets has positioned Malaysia as a preferred regional destination 

Key Takeaway 

With foreign inflows are gaining momentum underpinned by improving fundamentals, Malaysia’s equity market offers investors a compelling mix of local resilience and global relevance — truly a local bourse with foreign flavour.