KUALA LUMPUR (July 10): Bursa Malaysia has said there is much potential upside for Malaysian shares because the FBM KLCI has one of the lowest forward price-earnings ratios (PERs) among benchmark Southeast Asian equity indices and that Malaysia has the lowest inflation rate in the region.

"Despite rising concern over cost of living, Malaysia has the lowest inflation rate in the region. The FBM KLCI also has one of the lowest forward [PERs] and this could provide much potential upside to investors," Bursa's research arm Bursa Digital Research said in a Facebook post on Friday (July 8).

Quoting Bloomberg data as of June 2022, Bursa said the KLCI's PER stood at 15.1 times compared to Singapore's Straits Times Index's 12.9 times, Philippines Stock Exchange PSEi Index's 16.3 times, Indonesia's Jakarta Stock Exchange Composite Index's 16.7 times and Thailand's SET Index's 17.3 times.

At Bursa on Friday (July 8), the 30-stock KLCI closed up 7.1 points or 0.5% to 1,425.79.

Bursa's Facebook post also cited April 2022's average inflation data from the International Monetary Fund, which recorded year-on-year (y-o-y) changes in average consumer prices in these countries.

According to Bursa's Facebook post, Malaysia's average y-o-y growth in consumer prices stood at 3.05% compared to Indonesia's 3.29%, Singapore's 3.49%, Thailand's 3.51% and the Philippines' 4.26%.

According to the Department of Statistics Malaysia's (DOSM) latest reported data in a statement on June 24, 2022, Malaysia's inflation, as measured by the consumer price index (CPI), increased 2.8% in May 2022 from a year earlier, led by food's price rise of 5.2%.

The country's CPI rise accelerated to 2.8% in May 2022 from the 2.3% y-o-y increase in April 2022, according to the DOSM.

Bank Negara Malaysia (BNM) said in a statement on Wednesday (July 6, 2022) that year-to-date, Malaysia's headline inflation averaged 2.4%.

"While it is projected to remain within the 2.2%-3.2% forecast range for the year, headline inflation may be higher in some months due mainly to the base effect from electricity prices," BNM said.