Head of Retail Research, Affin Investment Bank, Nazri Khan, said the FTSE Bursa Malaysia KLCI (FBM KLCI) will continue trending higher towards the 1,530-1540 points resistance zone as investors react positively to regional news flow.
“Given the fact that the local index stayed above the 1,500-point level, after rising virtually seven straight days, showed that worries over the impact of the disaster in Japan on the rest of Asia have eased,” he said.
Nazri believed the local market recovery from the March 11 sell-off was completed as the FBM KLCI had reclaimed the price level just before the Japanese tsunami selling started.
Further, the stable Wall Street with the Dow breaking above the 12,000 level and with Nikkei rebounding 16% also suggested that the sentiment had improved.
“We note that the trading session has progressed with selling into strength dwindling and buying into weakness starting to rise in anticipation of more upside from solid first-quarter profits,” Nazri added.
He said the looming Sarawak election would also favour Sarawak-based timber, oil and gas, and plantation shares such as Jayatiasa, Dayang and Sarawak Plantation.
This week, the FBM KLCI finished higher to settle at 1,515.55 compared with last Friday’s 1,498.50 as demand bolstered from positive Wall Street and Asian cues as well as corporate news flow.
The FTSE Bursa Malaysia Emas Index increased 145.81 points to 10,416.93, the FTSE Bursa Malaysia Ace Index added 237.38 points to 4,223.54 and the FTSE Bursa Malaysia Mid 70 Index gained 274.66 points to 11,182.96.
The Finance Index increased 172.21 points to 13,736.580, the Plantation Index rose 68.74 points to 7,749.050 and the Industrial Index gained 31.04 points to 2,816.070.
The weekly volume surged to 6.125 billion shares, valued at RM8.214 billion, from 5.1 billion shares, valued at RM7.74 billion, last Friday.
The Main Market turnover increased to 5.1 billion shares, valued at RM8.02 billion, from 4.1 billion units, valued at RM7.56 billion, registered last week.
Volume on the ACE Market rose to 494.12 million, worth RM89.7 million, from 472.09 million shares, worth RM80.81 million, previously.
Warrants, however, decreased to 507.01 million units, worth RM99.95 million, from 532.85 million units, valued at RM92.46 million at the end of last week.