KUALA LUMPUR, Nov 21 — Speculation over the US Federal Reserve’s rate hike, President Obama’s trip to Malaysia and Chinese New Year small-cap play are expected to dominate sentiment on Bursa Malaysia next week and lead to range-bound play, says an analyst.
Affin Hwang Investment Bank Vice-President/Head of Retail Research, Datuk Dr Nazri Khan Adam Khan, said the local market is expected to trend sideways following an anticipated rate hike at the Federal Open Market Committee meeting on December 15-16.
Nazri said sentiment should be well supported by the European Central Bank’s further policy easing, year-end small-cap play and the second landmark trip of US President Obama to formalise Malaysia-US economic collaboration.
“Overall, with investors banking on the launch of the Trans-Pacific Partnership Agreement (TPPA) and the return of small-cap risk appetite as well as hoping for a crude oil price recovery, the FBMKLCI could possibly trade sideways in the 1660-1680 band before looking to retest its psychological level of 1,700 in the near term.” he told Bernama.
Local sentiment should get a boost from the second historic visit by Obama which will focus on economic talks with the prime minister, said Nazri.
“We expect stocks linked to the TPPA and Asean Economic Community to be in focus as President Obama forges deeper ties with the region,” he said.
Sector-wise, he said the bank foresees ample play on FBM Ace and FBM Fledgling with the approaching Chinese New Year rotation play such as Instaco, XOX, Rexit, SGB and Esceram.
“Strategy-wise, aggressive investors should go long on index futures while conservative traders should accumulate our Top 15 stocks in 2016 namely MYEG, Kossan, Harta, Top Glove, Evergreen, Petronas Dagangan, IHH, CMSB, Gtronic, Inari, QL, KPJ, Timecom, Hapseng and Westports,” he added. On a weekly basis, the key benchmark FBM KLCI finished at 1,661.89, up 2.98 points from the 1,658.91 level last Friday.
The FBM Emas Index advanced 30.11 points to 11,597.13, the FBMT100 Index rose 29.06 points to 11,267.38, the FBM Emas Shariah bagged 64.86 points to 12,528.53, the FBM 70 went up 65.78 points to 12,916.89, while the FBM Ace surged 518.55 points higher to 6,914.53.
Sector-wise, the Finance Index gave up 14.93 points to 14,078.27, the Plantation Index trimmed 14.30 points to 7,498.52, while the Industrial Index advanced 17.62 points to 3,293.71.
Weekly turnover expanded to 12.94 billion units valued at RM9.85 billion from 8.79 billion units valued at RM7.99 billion last week.
Main market volume rose to 7.42 billion units worth RM8.66 billion versus 5.40 billion units worth RM7.35 billion.
Warrant turnover shrank to 1.21 billion units worth RM177.39 million against 1.35 billion units worth RM617.52 million.
The ACE market surged to 4.30 billion units worth RM1.00 billion from 2.03 billion units worth RM460.54 million. — Bernama
