KUALA LUMPUR, March 1 — Positive external news is set to boost Bursa Malaysia’s performance next week, with the key barometer likely to retest the mid-December high of 1,850.

Affin Investment Bank Vice President/Head of Retail Research Dr Nazri Khan said local stocks should see momentum from the performance of world stocks, driven by a round of positive economic data.

“This is despite China’s renminbi volatility and elevated tensions in the Ukraine and Russia.

“We expect the local market to remain firm and trend higher as traders increase bets following the bullish testimony by Federal Reserve chair Janet Yellen and an imminent recovery of the global financial system.

“Although fears of pre-emptive Russian military intervention and a break-up of Ukraine remains a risk, global stocks continue to power up,” he told Bernama. 

He said Yellen’s testimony to Congress sprang no downside surprises on the markets as she reiterated that the Fed may consider the prospects of continued Quantitative Easing until there is solid data on economic strength.

Eurozone monetary policy was also in focus, as a drop in German consumer price inflation will increase the pressure on the European Central Bank to further ease policy at the next meeting, propelling the global market higher.

Regionally, the recent sharp fall in China’s renminbi has shown signs of fading.

From the inter-market analysis perspective, the stronger leadership by economically-sensitive groups and stronger gains by smaller cap stocks suggests healthy momentum in the near term.

“We reiterate that the FTSE Bursa Malaysia KLCI (FBM KLCI) remains above its monthly uptrend line and is thus in a secular bull market. That means any significant periods of weakness this year should be viewed as strong buying opportunities.

“While local blue chips consolidate on buoyant sentiment, impressive rotational interest in local small caps, should showcase healthy risk taking with active retail participation accumulating penny stocks,” Nazri added.

On a week-to-week basis, the FBM KLCI increased 4.92 points to 1,835.66, the Finance Index strengthened 41.84 points to 16,606.12 and the Plantation Index rose 17.26 points to 8,759.13.

The Industrial Index fell 5.69 points to 3,129.13.

The FBM Emas Index rose 1.65 points to 12,669.51, the FBMT100 Index grew 29.75 points to 12,355.76 and the FBM 70 was 20.25 points better at 13,833.71.

The FBM Ace declined 260.26 points to 6,443.87.

Weekly turnover fell to 13.2 billion shares worth RM11.29 billion, from last Friday’s 15.74 billion shares of RM12.18 billion.

Main market volume dipped to 9.54 billion shares valued at RM10.45 billion, from 12.54 billion shares at RM11.39 billion last week.

Warrants’ turnover decreased to 166.06 million units worth RM16.59 million, from 169.87 million units of RM16.84 million registered previously.

The ACE market volume improved to 3.45 billion shares at RM792.33 million from 2.99 billion shares valued at RM742.73 million transacted last week. — Bernama