KUALA LUMPUR, Oct 4 — Bursa Malaysia is expected to consolidate sideways following the weaker ringgit and fragile sentiment for commodities as the mood remained nervous against the backdrop of a weak outlook for global growth.          

Affin Hwang Investment Bank vice-president/head of Retail Research Dr Nazri Khan Adam Khan said lacklustre global manufacturing figures and uncertainties on the size of European Central Bank quantitative easing which is likely to end later this month would also influence market tone.           

In addition, the geopolitical tension spotted in Ukraine-Russia, Syria-Iraq, as well as, the on-going protest in Hong Kong would also dampen investor sentiment in the near-term, he said.          

However, Nazri said the 2015 Budget was expected to cushion the weakness especially for the technology, telecommunication and construction sectors which would benefit from the Goods and Sales Tax (GST) and other development measures to be announced on October 10.          

He said while the local equity market could be supported by favourable fourth quarter economic growth and ample liquidity, it should be dragged by the falling ringgit which could suffer from rising foreign outflow as a result of heightened geopolitical risk and uncertainties in US interest rates.          

“Hence, we prefer to adopt a ‘buy-on-dips’ strategy on momentum stocks perceived to be Budget 2015 winners.          

“We generally believe any fiscal stimulus in the Budget 2015 could be supportive to the equity market which may include corporate income tax cuts, allowance or personal tax break ahead of GST implementation,” he told Bernama.          

Nazri also said the implementation of the GST should be positive for mobile telecommunication players and major accounting solution providers.        

“Any pleasant surprises in the development expenditure, real property gains tax and poor aid programme may also be a good catalyst especially to the construction, property and consumer sectors.          

“While conservative investors may buy our twenty featured stocks such as CMSB, Matrix, Axiata, TM, Digi, Pintaras, Censof and Scientex, aggressive bulls might consider buying FBMKLCI index futures on a breakout above 1,840 and position for a larger jump to an all-time-high of 1,900,” Nazri said.          

For the week just-ended, the FBM KLCI edged up 0.32 of a point to end at 1,840.82 from 1,840.5 last Friday.         

The Finance Index slipped 31.77 points to 17,113, the Industrial Index decreased 30.37 points to 3,177.62, and the Plantation Index dropped 110 points to 8,306.7.          

The FBM Emas Index was 43.89 points lower at 12,853.16, the FBMT100 Index fell 29.33 points to 12,448.42, the FBM Emas Syariah Index was 33.16 points easier at 13,145.43, the FBM 70 decreased 155.76 points to 14,161.25 and the FBM Ace trimmed 247.06 points to close the week at 7,045.94.        

The weekly turnover decreased to 11.39 billion shares, valued at RM9.43 billion, from 12.53 billion shares, valued at RM10.11 billion, recorded last week.          

Main market volume eased to 7.91 billion units, worth RM8.850 billion, from 8.99 billion units, worth RM9.35 billion, registered previously.           

Warrants turnover expanded to 303.09 million units, valued at RM45.69 million, from 168.75 million units valued at RM25.95 million transacted last week.          

The ACE market volume appreciated to 3.15 billion units, worth RM532.35 million, from 3.24 billion units, worth RM719.65 million, recorded last Friday. — Bernama