Kuala lumpur: The FTSE Bursa Malaysia KLCI (FBM KLCI) experienced a robust beginning to 2026, advancing for four consecutive weeks to conclude January at 1,740 points. This positive trend was bolstered by policy optimism, improving macroeconomic indicators, foreign investments, a stronger ringgit, and increased market liquidity, according to CIMB Securities Sdn Bhd.
According to BERNAMA News Agency, CIMB Securities highlighted in its "Monthly Wrap: Jan 2026" report that the market sentiment was elevated following Prime Minister Datuk Seri Anwar Ibrahim's New Year 2026 address. The address, delivered on January 5, underscored governance reforms, stronger execution, and short-term economic support, alongside a better-than-expected fourth quarter 2025 advance gross domestic product (GDP) growth of 5.7 percent.
The report also noted that Bank Negara Malaysia's decision to maintain the overnight policy rate (OPR) played a role in supporting risk appetite. The average daily trading value (ADTV) of the FBM KLCI rose 21 percent year-on-year and 43 percent month-on-month to RM2.5 billion in January 2026, up from RM2.2 billion in December 2025.
Foreign shareholding by market capitalisation saw an improvement, rising 0.2 percentage points month-on-month to 19.2 percent in January 2026, driven by net foreign inflows. Local institutional investors emerged as the largest net buyers during the month, despite a 60 percent month-on-month decline in net inflows to RM1.1 billion, marking eight consecutive months of net buying.
Foreign investors transitioned to net buyers in January 2026, with net inflows of RM1.05 billion compared to net outflows of RM2.04 billion in January 2025. This marked the first instance of net foreign buying since September 2025. Conversely, retail investors were the largest net sellers in January 2026, recording net outflows of RM2.2 billion, continuing their trend of net selling for the fifth consecutive month.
CIMB Securities further noted that the FBM KLCI ranked as the third best-performing index among the MIST (Malaysia, Indonesia, Singapore, and Thailand) markets in January 2026, with a month-on-month gain of 3.6 percent. It outperformed Indonesia's Jakarta Composite Index, which saw a decline of 3.7 percent month-on-month. However, it trailed behind Singapore's Straits Times Index and Thailand's Stock Exchange of Thailand, which gained 5.6 percent and 5.2 percent month-on-month, respectively.
Sector-wise, property, financial services, and real estate investment trusts emerged as the top gainers in January 2026, while the healthcare, construction, and energy sectors lagged behind.