Rakuten Trade Sdn Bhd head of research Kenny Yee said an expected improvement in corporate earnings could also provide the additional support to take the index between the 1,600-point and 1,650-point levels.
The FBM KLCI closed at 1,500.29 points last Friday but opened lower at 1,486.52 today.
Yee said the growth momentum is likely to continue into next year, with the barometer index expected to be steadier compared with its performance this year.
Speaking to the media after the launch of Rakuten Trade’s currency facility here today, Yee said the net inflow of foreign funds has already reached RM8 billion.
“This is a plus point. Volatility is still low here compared with the rest of the region, and next year things will be even smoother with much better corporate earnings,” he said.
Yee noted that while uncertainties persisted in the market this year, and conditions became more challenging with the implemention of the prosperity tax, corporates reported good earnings growth.
“Let’s watch out for next year, it’s going to be much much better,” he said, adding that the inflationary pressure here is still not as bad as in the developed countries.
Touching on the ringgit, he said over the short term it is still on the weak side.
“However, we are only weakening against the US dollar, whereas against the region’s currencies we are strengthening. But once the US Federal Reserve has eased its quantitative tightening, we may see the ringgit rebound,” he added.
The local note opened lower today versus the greenback at 4.4795/4.4835 from Friday’s close of 4.4655/4.4675.
Yee also noted that tech stocks are currently “sexy”, but he personally prefers banking stocks, real estate investment trusts (REITs) and telco counters.
The healthcare sector, especially rubber glove companies, still have a lot of uncertainty, he said, adding that fundamentally things are still not that positive.
Rakuten Trade’s new and enhanced foreign market service includes the benefits of a foreign currency facility.
Investors can now convert funds between the ringgit and the US dollar via its iSpeed.my app and web platform. Conversions are made in real-time, at competitive rates and with no additional FX charges imposed on inter-currency trades.
With the rollout, investors can now trade in either the ringgit or the US dollar at low brokerage rates of RM7 to RM100 or US$1.88 to US$25, respectively.
“Almost 25,000 US trading accounts have been activated through Rakuten Trade since we first introduced the service in January and it has also served as a catalyst for new investors to test trading strategies on Bursa Malaysia before diversifying onto the U.S. markets,” CEO Kazumasa Mise said.
To date, more than 85% of Rakuten Trade’s clients trade first on Bursa Malaysia before making the foray into the US markets.
As a result, Rakuten Trade continues to record strong and steady trading growth on the NYSE (New York Stock Exchange) and Nasdaq, he said.
Mise said that Rakuten Trade expects to launch its Hong Kong share-trading service by the fourth quarter of this year after the US share-trading service.