Bursa Malaysia poised to breach 1,700-psychological level next week

Bursa Malaysia is likely to stage a strong rebound with the key index breaching the 1,700-psychological level next week. — Picture by Firdaus Latif
Bursa Malaysia is likely to stage a strong rebound with the key index breaching the 1,700-psychological level next week. — Picture by Firdaus Latif

KUALA LUMPUR, July 6 — Bursa Malaysia is likely to stage a strong rebound with the key index breaching the 1,700-psychological level next week amid positive market posture, after a long spell of downtrend seen in recent days dragged by profit-taking.

Inter-Pacific Securities head of research Pong Teng Siew said this would be backed by foreign investors’ sentiment which had turned more optimistic towards the local stock market, particularly after the US-China trade truce.

“We have seen the comeback of net foreign buying in a more consistent basis in these couple of weeks, which could help stabilise the local stock market,” he told Bernama.

Pong said the foreign net buying in local equities amounted to RM534 million from May 31, 2019 to last Wednesday, which was in stark contrast to foreign net selling worth about RM19.8 billion from May 2, 2018 up till last Thursday.

“This is a very significant change of heart among foreign investors since May 31, 2019,” he said.

Based on Amanah Investment Bank Bhd Research (MIDF Research) weekly report, overseas fund managers bought net RM134.6 million of stocks on Bursa Malaysia in June, the first monthly net inflow in five months.

Echoing Pong’s views, Phillip Capital Management Asia-Pacific senior vice-president (Investment) Datuk Nazri Khan Adam Khan expected fresh momentum for the FTSE Bursa Malaysia KLCI (FBM KLCI) next week towards the 1,700 psychological resistance, in response to the trade talks resumption between the US and China.

“Thus, our upside view is enhanced, with current support and resistance levels now pegged at 1,660 and 1,700-level, respectively,” he said, adding that consumer and construction stocks would be in focus for next week’s trading.

For the week just-ended, Bursa Malaysia was traded higher in the first two days but retreated thereafter, as the local bourse succumbed to profit-taking amid an overbought market.

The benchmark index closed at nearly four-month high on Tuesday at 1,691.0.

On a Friday-to-Friday basis, the FBM KLCI gained 10.40 points to 1,682.53 from 1,672.13 last Friday.

The FBM Emas Index added 123.71 points to 11905.29, the FBMT 100 Index advanced 109.77 points to 11,741.42 and the FBM Emas Shariah Index bagged 141.41 points to 12,274.35.

The FBM Ace Index soared 214.96 points to 4,660.41 and the FBM 70 surged 290.26 points to 14,889.97.

Sector-wise, the Financial Services Index jumped 112.0 points to 16.798.61, the Plantation Index climbed 8.23 points to 6,977.13 and the Industrial Products and Services Index inched up 1.80 points to 162.52.

Weekly turnover swelled to 14.56 billion units worth RM10.22 billion from 9.47 billion units worth RM8.73 billion last week.

Main Market volume expanded to 10.53 billion shares valued at RM9.30 billion against 6.05 billion units valued at RM7.93 billion.

Warrants turnover, however, eased to 1.87 billion units worth RM380.07 million versus 1.95 billion units worth RM442.2 million.

The ACE Market volume soared to 2.14 billion shares valued at RM533.77 million as compared with 1.44 billion units valued at RM332.69 million previously. — Bernama