KUALA LUMPUR: Bursa Malaysia is likely to trade firmer with an upside bias next week, on the expected return of risk appetite backed by external and local factors.
Phillip Capital Management, Asia-Pacific senior vice president (investment) Datuk Dr Nazri Khan Adam Khan said the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) is expected to move between 1,640 to 1,650.
“The Malaysian equity market is expected to be steady next week, on expectations of a US Federal Reserve (Fed) interest rate cut in the near term, and as trade uncertainties take a back seat given a lack of concrete developments over the now stalling US-China trade negotiations.
“The Fed is meeting on June 18-19 and investors are keen to see its monetary policy stance with the focus shifted to the increasing likelihood for the central bank to cut the rate multiple times this year after last Friday’s US poor nonfarm payrolls,” he said.
On another note, he said soaring tension in the Middle East after two oil tankers were damaged in suspected attacks in the Gulf of Oman near Iran and the Strait of Hormuz, which saw a spike in oil prices on concerns over supply disruption and the fall in Asian equities on Friday, is expected to be a temporary catalyst which would be offset by expectations of a US rate cut.
“The rising crude oil price would be a boost to Bursa Malaysia as 30 per cent of stocks on the exchange are correlated to the commodity,” he told Bernama.
The ringgit’s recent appreciation to about 4.1650 on Friday, which reflects the improvement of the Malaysian economy, is also supportive of market sentiment, Mohd Nazri added.
On a Friday-to-Friday basis, the benchmark FBM KLCI slipped 10.70 points to 1,638.63.
The FBM Emas Index eased 16.0 points to 11,564.65, the FBMT 100 Index trimmed 27.91 points to 11,412.51 and the FBM Emas Shariah Index shed 2.20 points to 11,788.24.
The FBM Ace Index added 123.40 points for 4,387.54 and the FBM 70 rose 153.71 points to 14,381.03.
Sector-wise, the Financial Services Index fell 97.39 points to 16,731.47, the Plantation Index reduced 2.39 points to 6,871.08 and the Industrial Products and Services Index eased 0.19 point to 160.35.
Weekly turnover increased to 10.07 billion units valued at RM9.07 billion from 4.15 billion units worth RM4.08 billion for the holiday-shortened week last week.
Main Market volume rose to 6.32 billion shares valued at RM8.11 billion from 2.77 billion shares worth RM3.83 billion.
Warrants turnover surged to 2.29 billion units valued at RM500.22 million from 798.82 million units worth RM173.33 million.
The ACE Market volume soared to 1.45 billion shares valued at RM455.11 million from 583.22 million shares worth RM70.19 million previously.