Bursa predicted to trade range-bound next week

KUALA LUMPUR – Bursa Malaysia is expected to trade range-bound within the 1,590-1,610 range next week as investors anticipate mild profit-taking in the index-linked counters.

Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said that on the domestic front, the benchmark index has broken the 1,600 and he maintains his cautiously optimistic view on the market due to foreign funds support and cheap valuations of the local market against regional peers.

“As such, we expect the FBM KLCI to trend range-bound with immediate resistance at 1,620 and support at 1,580.

“The mid-term view on Bursa Malaysia remains intact, however for the short term, we might see mild profit- taking,” he said.

For the week just ended, the FBM KLCI moved in tandem with the performance of global equity markets, influenced by the development of geopolitical conflict and the Wall Street performance following the persistently high inflation in the US.

On a Friday-to-Friday basis, the FBM KLCI strengthened 12.04 points to end the week at 1,603.30 from 1,591.26 in the previous week.

On the index board, the FBMT100 Index gained 166.28 points to 11.143.00, the FBM Emas Shariah Index increased 268.60 points to 12,086.59, the FBM Emas Index rose 189.82 points to 11,458.29.

Meanwhile, the FBM ACE gained 275.82 points to 5,615.28, and the FBM 70 surged 542.69 points to 13,810.67.

Sector-wise, the Technology Index improved 6.49 points to 79.45, the Plantation Index gained 173.63 points to 8,083.58, while the Industrial Products and Services Index rose 1.85 points to 205.19.

The Healthcare Index jumped 49.43 points to 2,111.83, the Financial Services Index gained 11.94 points to 16,743.73, and the Energy Index added 5.0 points to 723.97.

Weekly turnover inched up to 14.56 billion units valued at RM12.08 billion, from 14.48 billion units valued at RM16.85 billion the previous week.

The Main Market volume increased to 9.99 billion shares worth RM11.05 billion versus 9.53 billion shares worth RM15.73 billion previously.

Warrants volume dropped to 1.96 billion units valued at RM337.12 million against 2.73 billion units valued at RM522.76 million the previous week.

The ACE Market volume increased to 2.61 billion shares worth RM686.62 million against 2.21 billion shares worth RM599.21 million the week before.

Meanwhile, the ringgit is expected to trade on the upside bias moving between RM4.19 and RM4.20 next week, amid better risk appetite and fairly positive domestic economic data and outlook, an analyst said.

Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the ringgit had gained some strength yesterday despite the uncertainties over the conflict in Ukraine, as domestic economic data suggested inflation rate is still fairly contained.

February consumer price index was up at a slower rate of 2.2% compared to 2.3% in the preceding month as well as lower than the consensus estimates of 2.4%.

On another note, foreign net inflows in the equities market space have been quite encouraging, with total net purchases of slightly more than RM6 billion on a year-to-date basis compared to net sales of RM3.1 billion for the whole of 2021.

“This means the ringgit should be well supported in the event that such flows remain persistent throughout the year.

“Further reopening of the economy would also translate into more dynamic business activities and, therefore, companies’ earnings. This could incentivise foreign funds to be constructive on our bourses along with attractive valuation,” he said.

Meanwhile, from a technical standpoint, ringgit versus the US dollar is already in the oversold region, signalling the ringgit would likely appreciate in the near term, he said.

“With the current resistance and support level located at RM4.2104 and RM4.1870 respectively, next week, we would be able to stage some appreciation, around RM4.19 to RM4.20,” he added.

On a weekly basis, the ringgit was lower against the greenback at 4.2080/2110 from 4.1930/1975 a week ago.

The local currency was traded mixed against a basket of major currencies on a Friday-to-Friday basis.

It rose against the Japanese yen to 3.4608/4633 from 3.5259/5300 and improved vis-à-vis the euro at 4.6305/6338 from 4.6370/6420.

The local unit fell against the British pound to 5.5394/5434 from 5.5100/5159 and eased against the Singapore dollar to 3.1021/1045 from 3.0924/0960 a week earlier. – Bernama, March 26, 2022