.png)
KUALA LUMPUR – Bursa Malaysia is expected to witness cautious trading next week amid a lack of major catalysts to influence investors’ risk appetite.
Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng said accumulation of stocks would persist on dips, with the FBM Bursa Malaysia (FBM KLCI) remaining well supported above the 1,520 level.
“As such, we anticipate the FBM KLCI to hover within the range of 1,525-1,545 next week.
“From a technical point of view, the benchmark index will see its immediate support at 1,520, followed by the psychological support at 1,500 with resistance at the 1,565 level,” he said.
Yesterday, the benchmark index rose 1.75 points to close at 1,525.54, lifted mainly by telecommunications and media counters.
“Key regional markets were mostly positive after Wall Street closed at a record high during the previous session.
However, investor sentiment in Hong Kong and China was cautious after Alibaba missed revenue and earnings expectations, causing the stock to fall more than 10%.”
On a Friday-to-Friday basis, the benchmark index eased 5.68 points to end the week at 1,525.54 from 1,531.22 previously.
On the index board, the FBM Emas Index fell 83.21 points to 11,245.64, the FBMT 100 Index dropped 71.73 points to 10,895.58, and the FBM Emas Shariah Index decreased 112.27 points to 12,227.75.
The FBM 70 shed 218.98 points to 14,783.56, while the FBM ACE erased 162.93 points to 6,815.06.
Sector-wise, the Financial Services Index rose 19.87 points to 15,225.58, the Industrial Products and Services Index was 1.7 points easier at 199.97, and the Energy Index fell 19.05 points to 769.8.
The Plantation Index slid 67.84 points to 6,605.1, the Healthcare Index erased 51.93 points to 2,308.06, while the Technology Index rose 1.31 points to 100.47.
Weekly turnover declined to 15.25 billion units worth RM11.17 billion, from 15.77 billion units worth RM11.71 billion in the previous week.
The Main Market volume eased to 10.02 billion shares valued at RM9.54 billion, from 10.3 billion shares valued at RM9.87 billion in the prior week.
Warrants volume improved to 1.42 billion units worth RM299.53 million versus 1.18 billion units worth RM208.88 million previously.
The ACE Market volume, meanwhile, shrank to 3.78 billion shares worth RM1.33 billion from 4.25 billion shares worth RM1.62 billion in the previous week.
Ringgit expected to decline further
Meanwhile, the ringgit is likely to continue its decline against the United States dollar next week amid the absence of local market catalyst and the strengthening greenback.
Hong Leong Research expects the US dollar’s upward trajectory to extend for another week amid inflationary concerns and US Federal Reserve rate hike expectations.
It said the pair last settled at 4.1820 on Thursday, up 0.27% week-on-week, after having traded between 4.1580 and 4.1830 over the last five trading sessions.
“We remain neutral-to-bullish on the greenback premising on expectations for a still firm US dollar, with little domestic catalyst to drive the ringgit,” it said.
Meanwhile, Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the ringgit ended the week on a weaker note as US economic data remains positive, suggesting that earlier interest rate hike narratives would gain further momentum going forward.
He said rising Covid-19 cases in Europe could also result in risk-off mode to prevail, leading to demand for safe haven currency, namely the US dollar.
However, he said the ringgit appeared to be well supported as the greenback continues to struggle to breach the immediate resistant level of RM4.1862.
“The local note is probably supported by the higher interest rate differential between Malaysia’s overnight policy rate of 1.75% and the Federal Funds Rate of 0.25%, as well as the reopening of the economy that would lift the growth prospects.
To a large degree, the local currency is also supported by the Brent crude oil prices that have stayed at elevated levels presently.
“As such, we foresee the ringgit to continue to range between RM4.17 and RM4.19 next week,” he added.
On a weekly basis, the local note was weaker versus the greenback at 4.1810/1850 from 4.1645/1665 at yesterday’s close.
The local unit was traded mixed against other major currencies compared to the previous Friday.
The ringgit rose against the Singapore dollar to 3.0702/0736 from 3.0757/0776 a week earlier and improved against the euro to 4.7249/7295 from 4.7646/7669 previously.
However, it depreciated against the Japanese yen to 3.6675/6714 from 3.6521/6542 a week before and fell vis-a-vis the British pound to 5.6147/6200 from 5.5783/5810 previously. – Bernama, November 20, 2021