Bursa Malaysia likely to continue to strengthen next week

An investor monitors share market prices at a brokerage firm in Kuala Lumpur, Malaysia, August 24, 2015. — Reuters pic
An investor monitors share market prices at a brokerage firm in Kuala Lumpur, Malaysia, August 24, 2015. — Reuters pic

KUALA LUMPUR, June 1 — Bursa Malaysia is likely to continue last week’s upswing, driven by safe haven play as the global markets fall on Trump anti-trade risk-off scenario and slower global economic growth.

Phillip Capital Management, Asia-Pacific, senior vice president (investment) Datuk Dr Nazri Khan Adam Khan said safe haven or defensive assets such, as high dividend stocks listed on Bursa Malaysia, would be propping up the bourse.

“We have higher dividend yields compared with the rest of world and we have more government-linked-companies and government liquidity to support any break,” he told Bernama.

However, asked about external pressures on Bursa Malaysia, he explained that investors would likely take a wait-and-see approach and seek updates on the ongoing trade war between the US and its trade partners.

“They want to see where this trade war is heading to, as it could be another gimmick by the US president,” he said, adding that further volatility in global market could, however, affect local market.

So far, Nazri said, Bursa Malaysia had been holding well above the 1,600 level, which is the psychological support.

Stocks in Asia Pacific slipped yesterday after data showed that China’s manufacturing activity declined more than expected  in May, with the official manufacturing Purchasing Managers’ Index (PMI) for the month coming in at 49.4 versus earlier analysts’ expectations of 49.9.

From the technical perspective, the local bourse continued to climb the whole week above the meaningful 1,630-point support mark on rising volume suggesting more upside momentum in the near term.

“The index may soon test the next resistance, estimated at 1,650. This can be seen by the positive trend on the daily chart with slow stochastic start to move to 80 levels, which is the overbought threshold,” Nazri said.

For the week just ended, local equities posted a five-day winning streak despite volatile performance registered by global peers, mainly supported by decent financial performance of companies.

On a Friday-to-Friday basis, the benchmark FBM KLCI jumped 52.44 points to 1,650.76.

The FBM Emas Index rose 400.45 points to 11,588.37, the FBMT 100 Index soared 408.69 points to 11,450.50 and the FBM Emas Shariah Index surged by 480.27 points to 11,795.77.

The FBM Ace Index added 10.42 points to 4,299.42 and the FBM 70 firmed by 691 points to 14,240.53.

Sector-wise, the Financial Services Index gained 313.48 points to 16,848.04 and the Plantation Index added 105.77 points to 6,922.86 but the Industrial Products and Services Index edged down 1.96 points to 160.05.

Weekly turnover jumped to 10.64 billion units worth RM12.87 billion from 6.07 billion units valued at RM5.12 billion.

Main Market volume almost doubled at 7.29 billion shares worth RM12.19 billion from 3.83 billion shares worth RM4.67 billion.

Warrants turnover expanded to 2.08 billion units worth RM463.1 million from 1.06 billion units valued at RM280.38 million.

The ACE Market volume climbed to 1.27 billion shares worth RM211.99 million from 1.16 billion shares worth RM177.59 million. — Bernama  

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