KUALA LUMPUR (Jan 7): The Malaysian stock market's main benchmark could rise above 1,800 points by end-2026, supported by stronger corporate earnings growth amid resilient domestic demand and improving policy certainty, said CGS International Securities Malaysia chief executive officer Khairi Shahrin Arief Baki.

Khairi said that the research firm’s 1,810-point year-end target for the FBM KLCI is underpinned by the fact that about 85% of the index's constituents under its coverage are domestically driven, reducing sensitivity to external demand and export-related risks.

The target represents an upside of about 7.9% or 133.17 points from the index's latest close of 1,676.83 on Wednesday (Jan 7).

Khairi added that a stronger ringgit would help reduce operating and capital expenditure costs for some sectors, such as utilities and telecommunications.

CGS International expects KLCI corporate earnings to expand by 8.5% this year, compared with an estimated 3.5% growth in 2025, he told The Edge at the sidelines of the research firm’s annual Malaysia Corporate Day event.

Khairi noted that recent policy reforms, including subsidy rationalisation, have improved Malaysia’s fiscal position and provided greater policy certainty, which in turn supports business and consumer confidence.

Earlier, in his welcoming remarks at the event, Khairi said the stronger ringgit has improved gross margins for corporates with higher imported content and lowered interest costs for companies with foreign borrowings, while also helping to lift consumer sentiment.

He added that easing trade tensions and greater policy certainty have increased the willingness of both businesses and consumers to invest and spend, which should be supportive of corporate earnings and broader market conditions.

Year-to-date, the KLCI is down 3.28 points or 0.2% at 1,676.83.

Khairi attributed the softer start to the year to the market having run ahead in December, as local investors positioned earlier on the expectation of improving domestic fundamentals.

For the whole of December, the KLCI gained 4.7% to end the month at 1,680.11.