KUALA LUMPUR: Bursa Malaysia is likely to move higher and retest the 1,650 level next week, as investors anticipate more positive announcement from Prime Minister Tun Dr Mahathir Mohamad’s working visit to China.
Rakuten Trade Sdn Bhd head of research Kenny Yee said market players were hoping that more projects would be tied up for the infrastructure and construction sectors as this would boost development growth in both sectors and create more job opportunities in the future.
“Although foreign funds remained net sellers earlier in the week, a reversal of the trend was seen in the past two days when we see net inflows.
“We think this could be the start of tapering of the sell-off in funds,” he told Bernama.
Yee said the local bourse also saw improvement in buying for small caps and construction stocks, even though the shares of these counters retreated due to profit-taking.
Besides that, he said talks that Bank Negara Malaysia would reduce the overnight policy rate (OPR) could be an opportunity for investors to buy, as share prices would be cheaper on pullbacks.
Meanwhile, Phillip Capital Management Malaysia senior vice-president (investment) Datuk Dr Mohd Nazri Khan Adam Khan said that FBM KLCI was expected to move lower towards the 1,620 to 1,630 level next week on the likelihood of more foreign fund outflows.
This is due to the slowdown in the domestic and global economy, which are pushing international investors to shift their asset allocation into safe havens such as bonds and money market.
“On another note, the surging US dollar value is making things more expensive, where we will see our commodities such as palm oil declining and the ringgit depreciating further.
“Not only Malaysia will be seeing a further outflow, but also the regional markets as well. For instance, China, Japan and Hong Kong this week saw the worst week of their stock market closing since October last year,” he told Bernama.
On a Friday-to-Friday basis, the ringgit fell to 4.1310/1340 against the US dollar from 4.1300/1350 previously.
During the week just-ended, Bursa Malaysia was traded mostly higher following optimism on the revival of the East Coast Rail Link and Bandar Malaysia mega project and in tracking the Wall Street performance.
Ekovest was the most-actively traded stock for the week. It ended flat at 94.5 sen on Friday with 111.24 million shares changing hands.
On a Friday-to-Friday basis, the benchmark FBM KLCI settled 16.31 points higher at 1,638.38.
The FBM Emas Index rose 168.58 points to 11,665.81, the FBMT 100 Index climbed 152.24 points to 11,477.12 and the FBM Emas Shariah Index jumped 195.90 points to 11,885.92.
The FBM Ace Index soared 100.99 points to 4,793.84 and the FBM 70 put on 348.22 points to 14,730.73.
Sector-wise, the Financial Services Index improved 136.20 points to 16,881.46, the Plantation Index gained 69.56 points to 7,298.47 and the Industrial Products and Services Index added 3.71 points to 172.01.
Weekly turnover expanded to 19.50 billion units valued at RM13.10 billion against 14.13 billion units worth RM9.25 billion last Friday.
Main Market volume swelled to 15.56 billion shares worth RM12.36 billion against 9.32 billion shares valued at RM8.41 billion.
Warrant turnover eased to 1.87 billion units valued at RM342.41 million from 2.03 billion units worth RM430.00 million.
The ACE Market volume was lower at 2.06 billion shares valued at RM397.52 million versus 2.78 billion shares valued at RM409.25 million.
Gold futures contracts on Bursa Malaysia Derivatives are expected to trade lower next week, as the recovery in the global economy curbs demand for the precious metal, a dealer said.
She said the US Department of Commerce yesterday announced that the US economy grew by 3.2 per cent in the first quarter of 2019, the fastest pace of first-quarter growth since 2015.
“This would improve the US dollar but does not provide support for gold trading on the US Commodity Exchange’s (Comex) gold futures market, and our local gold market would be dragged down by Comex,” she said, adding this will make gold an unattractive safe-haven asset.
For the week just ended, the gold futures market started on a weak momentum but managed to pick up towards the end of the week.
The gold futures market movement was also influenced by Comex’s performance, the movement of ringgit versus the US dollar, as well as crude oil prices.
On a Friday-to-Friday basis, April 2019 and May 2019 fell four ticks to RM169.80 a gramme and RM169.80 a gramme, while June 2019 stood at RM169.90 a gramme and July 2019 was two ticks higher at RM170.00 a gramme.
Weekly turnover declined to two lots worth RM34,040 from nil last week, while open interest remained unchanged at 34 contracts. — Bernama
