Rakuten Trade Keeps End-2026 FBM KLCI Target At 1,770, Budget 2027 Next Key Test

KUALA LUMPUR, Sept 11 (Bernama) -- Rakuten Trade Sdn Bhd is keeping its end-2026 Bursa Malaysia benchmark index FBM KLCI target at 1,770, underpinned by clearer earnings visibility from Malaysia’s power and grid infrastructure spending.

The digital equity broker said the target assumes Budget 2027, to be tabled on Oct 9, will confirm rather than materially defer planned energy-transition and grid-related spending.

Despite around RM2 billion in net foreign selling in August, it said domestic investors continued to support the market, while recent earnings results showed that growth remained intact, with utilities among the contributors.

"We are keeping our 1,770 target. The recent results season depicts that growth remains intact, with utilities being one of the contributors, and they sit in the grid, not in the chip cycle,” its research head Kenny Yee said in a statement today.

Rakuten Trade sees Malaysia’s ongoing investment in power infrastructure as a key earnings catalyst into year-end and beyond.

It also believes that the opportunity extends beyond traditional renewable-energy plays, with grid expansion requiring sustained investment in transmission, substations, electrical systems and related engineering works.

Moreover, the government has also identified energy transition as one of five priority sectors for Budget 2027, alongside semiconductors, the digital economy, artificial intelligence and Islamic finance, it said.

"Tenaga Nasional Bhd’s grid capital expenditure programme has risen to RM43 billion for 2025-2027, compared with RM21 billion spent between 2022 and 2024.

"Further investment is expected through 2030 as the national grid is upgraded to support renewable energy, battery storage and rising electricity demand, including those from data centres," it said.

The firm noted that Budget 2027 is the next key test for its target.

Yee said Rakuten Trade will revisit its KLCI target if Budget 2027 pushes energy-transition spending into the latter part of the plan period, or if the grid allocation comes in materially below what has been signalled.

Moving forward, it expects risks to arise from weaker-than-expected budget allocations, delays in major infrastructure tenders and project execution, continued foreign fund outflows and volatility in global interest rates.

-- BERNAMA