The research house said this was largely because the FBM KLCI has generally yielded positive returns in the three-month periods up to the past election polling dates, apart from robust headline economic indicators which support the ringgit and investment sentiment. The GE14 is widely expected to be held in March or April next year.
PETALING JAYA: The performance of the local market has not been helped by the multitude of issues affecting global investment sentiments.
Falling for seven straight sessions, the FBM KLCI hit a year's low on Wednesday. Based on a technical view of the chart, it looks set to breach the key 1,700-point level.
While policy changes by the new ruling government have been said to impact investor sentiment in Malaysian equity, there have been headwinds coming from the external front.
Heading the list of problems is the recent political developments in Italy, which have sent banking stocks in Europe and the US reeling.
Overnight, major European markets were pummelled with the DAX, FTSE and CAC falling 1.5%, 1.26% and and 1.29% respectively.
Wall Street showed similar results, with each major indice losing in excess of 1%.
A political impasse between pro-EU and anti-EU factions in Italy meant a coalition government could not be formed, which will lead the way to snap elections in Europe's third-largest economy.
Depending on the outcome, these fresh elections may determine Italy's future participation in the euro.
This comes amid a souring environment for emerging markets as funds are repatriated to the US amid a strengthening greenback.
In contrast to a stellar year for emerging markets in 2017, rising US Treasury yields and US Fed hikes have left emerging markets, especially in South America, reeling.
Rounding out the trio of external headwinds currently plaguing global equity investment, the trade war between the US and China looks to have re-opened.
On Tuesday, US President Donald Trump reversed gears with an announcement that it would move ahead with a plan to impose 25% tariffs on US$50bil of imported Chinese goods.
This came barely a week after Treasury Secretary Steven Mnuchin had said the trade war was put "on hold".
Coming back to the domestic front, Tun Dr Mahathir Mohamad's administration's "belt-tightening" in light of high national debt has cast concern over the immediate growth trajectory of the economy.
However, these efforts to strengthen the nation's fiscal condition have been well-received as a "longer-term positive" despite the cancellation of mega-projects that have sent the share prices of certain companies spiralling.
Meanwhile, more conservative investment by government-linked companies means Bursa Malaysia may not have the same buying support it saw in 2017. But the domestic fundamentals remain intact and are expected to improve with the rationalisation of debt-to-GDP levels.
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