KUALA LUMPUR (Feb 21): Affin Hwang Asset Management Bhd sees the KLCI's upside is likely to be capped around 8-10% this year, mainly attributed to externally driven factors but offset by tepid corporate earnings growth.

Affin Hwang Assets Management managing director Teng Chee Wai (pictured) told a press conference today he sees optimism from the US Federal Reserve turning more dovish and US dollar strength starting to top out.

On top of that, he also assumed a positive outcome from the US-China trade war will support the market this year.

"I do not see P/E (price earnings) expansions will be one big factor in this year. All (will be) mainly driven by macro prospects.

"With the 5% growth in corporate earnings, I do not expect this will be a double digit growth year (for the KLCI)," said Teng.

There would be downside risks to Malaysian corporate earnings if the global economy continues to slow down, Teng added.

At 12.30pm, the FBM KLCI shed 2.24 points to 1,723.94. The index had earlier slipped to a low of 1,719.67.