KUALA LUMPUR, Nov 8 ― The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) is expected to dip, in the early part of next week, before recovering lost ground, with several bluechips trading at bargain prices.
As the key index closed at its lowest intra-day point of 1,824.19 last Friday, traders said it would resume testing at least one support level, before bargain hunting start to flow into the local bourse next week.
“Chart-wise, expect key support level of 1,817 to be tested early next week, before the composite index rebounds towards the 1,850 resistance level.
“After a week sell-off, market seems in oversold state. Several Bursa's bluechips are now trading below valuation,” said a senior trader.
He cited the example of Tenaga Nasional Bhd (TNB) which turned in a set of above expectation third quarter financial results.
Four research house namely Maybank IB Research, Alliance-DBS Research, AffinHwang Investment Bank and Hong Leong Investment Bank revised their target price for TNB at RM16, RM14.85, RM15 and RM16.50, respectively.
TNB, which ranked second in terms of CI weighted contribution, eased two sen to RM13.00 on Friday.
“Third quarter corporate earnings announcements shall activate bargain hunting activities on Bursa, thus there is likely to be a bit more risk appetite and volume in the market place next week,” he told Bernama.
While he warned that last week’s stock market sell-off could happen again, it could however provide a window of opportunity for investors' to accumulate selected bluechips and lower liners.
“We could see better trading next week, as our trade figures have continuously shown improvement,” another trader said, citing Malaysia's total trade in September 2014 which improved 1.6 per cent to RM119.72 billion from RM117.88 billion a year ago, while the trade surplus was recorded at RM9.33 billion.
“We expect Bursa to end the correction phase before the week ends and rebound higher towards 1,850 ahead of the UMNO General Assembly (November 25-29), driven by another strong Wall Street finish,” he added.
Several FBM KLCI components were on profit-taking mode for a straight 5-days last week, while for second liners and downwards, profit taking interspersed with buying interest, and all eyes were on Malaysia Airlines System Bhd as it conducted its extraordinary general meeting to approve its privatisation plan.
For the week just-ended, the FBM KLCI tumbled 30.96 points to 1,824.19, the FBM Emas Index retraced 205.88 points lower to 12,677.01, the FBMT100 Index shed 200.91 points to 12,316.31 and the FBM Emas Syariah Index was 223.53 points easier at 13,122.84.
Sector-wise, while the Industrial Index added 13.76 points to 3,293.16, the Finance Index declined 231.57 points to 16,594.96 and the Plantation Index dipped 79.57 points to 8,474.28.
The FBM 70 lost 196.52 points to 13,936.49 while the FBM Ace rose 192.54 points to end the week at 6,778.57.
The weekly turnover soared to 11.20 billion shares, worth RM10.53 billion, from 10.51 billion shares, worth RM10.31 billion, recorded last week.
Main market volume increased to 7.70 billion units, valued at RM9.53 billion, from 7.56 billion units, valued at RM9.56 billion, registered previously.
The ACE market volume improved to 3.21 billion units, valued at RM964.71 million, versus last week's 2.57 billion units valued at RM694.13 million.
Meanwhile, warrants turnover shrank to 259.79 million units, worth RM27.96 million, from 341.51 million units, worth RM41.51 million, transacted the previous week. ― Bernama
