KUALA LUMPUR, May 24 — The local bourse is expected to rebound next week due to favourable external factors, said Affin Investment Bank.

Vice-President/Head of Retail Research Dr Nazri Khan said global equity markets should benefit from a relatively dovish tone from the minutes of the

Federal Open Market Committee meeting with prospects for easy monetary policy to remain intact for the foreseeable future.

 “Signs of global monetary easing paved the way for global equities to edge higher, with underlying support coming from the latest signals from the US Federal Reserve that it was in no hurry to start raising interest rates,” he told Bernama.

Nazri expects a positive response to the mega listing of 7-Eleven Malaysia Holdings Bhd and Boustead Plantations Bhd in late May and June, respectively, to provide the local catalyst to the domestic bourse.

Stock-wise, he said traders should accumulate world cup-linked blue chip stocks which would do well as the event approached, such as TM, Axiata, Digi, Astro, Dutch Lady, Gtronic, MPI, Unisem, IJMPlant and KMLoong.

On the technical front, he said the FBM KLCI closed above the 20-day and 50-day moving average, indicating the trend was still turning up, however, momentum studies were trending lower suggesting an ongoing pullback.

 “We believe this is a temporary correction and a healthy pullback to the 6.2 per cent gain made since early February this year,” he said.

Nazri said the next area of upside is the all-time-high near the 1,890 points and ultimately the 1,900 points strong psychological resistance.

From the market breadth perspective, he said there was a slight negative distribution with weekly decliners beating advancers by a moderate four to three on a slightly heavier average daily trade of two billion shares worth RM2.1 billion.

During the trading week, the FBM KLCI hit a fresh all-time high of 1,887.07 points and an intra-day high of 1,889.47 points on Monday.

The Plantation Index fell 150.87 points to 9,215.24, the Finance Index eased 5.66 points to 17,078.19 and the Industrial Index decreased 9.72 points to 3,196.99.

The FBM Emas Index fell 71.52 points to 12,923.95, the FBMT100 Index trimmed 70.54 points to 12,574.26, the FBM Ace erased 70.73 points to 6,598.67 but the FBM 70 improved 16.93 points to 14,049.04.        

Weekly turnover expanded to 9.6 billion shares, worth RM10.5 billion, from last week's 6.71 billion shares worth RM8.66 billion.

Main market volume rose to 7.42 billion shares, valued at RM10.03 billion, from 5.32 billion shares, valued at RM8.29 billion, recorded last week.

Warrant turnover appreciated to 276.33 million units, worth RM40.8 million, from 179.98 million units, worth RM37.02 million, recorded previously.

The ACE market volume increased to 1.67 billion shares, valued at RM403.68 million, from 1.2 billion shares, valued at RM323.76 million, registered last Friday. — Bernama