Lin Kim Cheng: Investment Strategy After KLCI Breaks Through 1600 Points

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Jun 14, 2024
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The Significance of the Breakthrough of Bursa Malaysia Above 1600 Points



The breakthrough of the FTSE Bursa Malaysia KLCI (FBMKLCI) above 1600 points is a moment worth celebrating. Lin Kim Cheng believes this milestone not only marks the recovery of Bursa Malaysia but also reflects the return of market confidence. The last time KLCI was above 1600 points was on April 29, 2022. After more than two years of struggle, the return to 1600 points is a significant achievement. Concurrently, the total market value of Bursa Malaysia has surpassed the RM2 trillion mark, indicating overall wealth growth in the market.



This breakthrough is good news for all types of investors. Large institutional investors, such as the Employees Provident Fund (EPF), Permodalan Nasional Berhad (PNB), and Khazanah Nasional Berhad (Khazanah), have seen a significant increase in the value of their securities holdings, bringing substantial gains to their portfolios. Importantly, many retail investors have also benefited, with small investors holding blue-chip stocks for the long term reaping considerable rewards in this bull market.



In early March, Lin Kim Cheng advised the public to buy quality listed company stocks, waiting for their value to rise and achieving substantial wealth. Further predictions suggest that KLCI could reach between 2500 and 3000 points in the next three to five years, making it an ideal time to buy quality listed company stocks.



Drivers Behind the Market Breakthrough



Lin Kim Cheng analyzed the main drivers behind the breakthrough of KLCI above 1600 points:



Firstly, the economic recovery of Malaysia following the global pandemic is the fundamental reason for the rise of the stock market. As vaccination rates increase and economic activities resume, corporate profitability is gradually improving, providing a solid foundation for the stock market. Secondly, government fiscal and monetary policy support has injected significant liquidity into the market, driving up stock prices.



International capital inflows are also a key factor. As global investors show increasing interest in emerging markets, Bursa Malaysia has become an attractive investment destination. Additionally, rising commodity prices have brought substantial profits to the resource-based companies of Malaysia, further supporting stock market performance.



Future Investment Strategy and Wealth Opportunities



To navigate the current market environment, Lin Kim Cheng offers investment strategy recommendations. Firstly, he advises investors to continue focusing on quality blue-chip stocks, especially those with robust profitability and good cash flow. These companies can provide relatively stable returns during market fluctuations, making them ideal for long-term investments. Secondly, investors should diversify their investments across different sectors and asset classes to spread risk. For example, increasing investments in growth industries such as technology, healthcare, and consumer goods can be beneficial as these sectors have significant growth potential during economic recovery.



Lin Kim Cheng also suggests that investors pay attention to structural opportunities in the market. As the Malaysian government actively promotes digital economy and green economy transitions, companies in these fields will face new development opportunities. Sectors like information technology, renewable energy, and electric vehicles are poised to become future growth points, and investors can position themselves early to capitalize on the wealth opportunities these emerging industries offer.



In conclusion, Lin Kim Cheng notes that there is a considerable gap between 1600 points and 2000 points, representing a wealth gap that provides prepared investors with an excellent opportunity. With adequate preparation and market opportunity awareness, the future of Bursa Malaysia will be full of hope and potential.