Bursa Malaysia likely to trade in cautious mode next week

KUALA LUMPUR, Nov 5 — Bursa Malaysia is expected to trade in a cautious mode next week, with investors eagerly awaiting the outcome of the US Presidential election on Tuesday.

Affin Hwang Investment Bank Vice President/Head of Retail Research, Datuk Dr Nazri Khan Adam Khan, said with the uncertain economic outlook, the benchmark index is expected to be trapped between 1,640 and 1,660 points next week.

“The FBM KLCI, along with other regional markets, seems to be focused on the election, with no policy surprises made by the four central banks meeting this week,” he told Bernama.

With most investors hoping for Hillary Clinton to win the race, Nazri said the market is expected to rebalance once the election is over.

The decision by the US Federal Reserve and Bank of Japan to maintain their interest rates at current levels bodes well with market expectations, given the decisions will not affect the market.

The weakening oil prices are also expected to add to the pressure next week, he said.

However, Nazri said, some positive local data this week are expected to provide some support to the market next week.

“Our strong consumer confidence level data and stable purchasing managers index released recently showed that our fundamentals remain strong,” he said.

Nazri also expects Prime Minister Datuk Seri Najib Razak’s official visit to China to give a positive impact on the market due to the potential of more investments coming from China.

The slightly positive trade data released on Friday will also cushion the market next week, he added.

Malaysia’s total trade during the period of January-September 2016 rose marginally higher by 0.6 per cent to RM1.077 trillion compared with the same period in 2015, supported by exports in manufactured and agricultural goods.

For the week just ended, the benchmark FBM KLCI slipped 22.03 points to 1,648.24 compared with 1,670.27 last Friday.

On a week-to-week basis, the FBM Emas Index declined by 176.18 points to 11,607.72, the FBMT 100 Index fell 169.95 points to 11,315.80 and the FBM Emas Syariah Index was 191.34 points lower at 12,231.96.

The FBM Ace decreased by 126.33 points to 4,987.40 and the FBM 70 lost 270.27 points to 13,486.18.

On a sectoral basis, the Finance Index dropped 266.55 points to 14,259.50, the Industrial Index shed 12.47 points to 3,145.04 and the Plantation Index erased 180.08 points to 7,777.43.

Weekly turnover contracted to 7.22 billion units worth RM9.08 billion versus 7.58 billion units worth RM8.62 billion last Friday.

Main market volume shrank to 4.73 billion units worth RM8.69 billion against 4.97 billion units worth RM8.12 billion last week.

Warrant turnover rose to 1.37 billion shares valued at RM232.88 million compared with 1.16 billion shares valued at RM169.26 million previously.

The ACE market narrowed to 1.10 billion shares worth RM152.33 million compared with 4.09 billion shares worth RM224.95 million last week. — Bernama