KUALA LUMPUR, July 27 — Bursa Malaysia will remain indifferent next week as traders await local and foreign leads to renew interest on the heavyweights following the unresolved US-China trade dispute to partly determine the market direction.

The 1,700 points expectation might now become a major hurdle, according to Malacca Securities Sdn Bhd.

“We see upsides if there are positive developments in the trade talks or vice versa, but much will also be dependent on the trade agreement details and the impact to global trade and economic performances.

“Therefore, any relief rally could still be muted if any trade agreement is seen as superficial with few immediate benefits to the global growth,” it said in a statement.

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The US and China, two of the world biggest economies, are set to resume their trade talk, while trying to bridge differences over trade and technology and geopolitical issues.

US officials are likely to travel to China for the discussions sometime between July 26 and August 1.

However, the White House officials was said to be eyeing a longer-term timeline to strike a deal, which could take roughly six months.

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Meanwhile, Malacca Securities said although the FBM Small Cap index is overbought and a consolidation is due, there are still value propositions among its constituents as some industry leaders are displaying firm growth prospects to sustain earnings growth, coupled with still favourable valuations.

“However, we think that buying opportunities will present themselves after a consolidation spell to adjust from overbought. At the same time, high dividend yielding stocks will continue to appeal to more conservative market players for portfolio resilience and hedge against the rising market volatility,” it added.

Philip Capital Management on the other hand maintains its optimistic view of the local market, despite the mixed signals which gauged the global economies.

“We believe that the FBM KLCI will eventually regain its bullish sentiment after digesting the implication of the European Central Bank (ECB) meeting,” its senior vice-president (investment), Datuk Nazri Khan Adam Khan told Bernama.

On the technical analysis, he saw minor correction after the FBM KLCI tested the 200-day moving average line was still in play and set the immediate resistance at 1,658 points, followed by the strong resistance at around 1,700 points.

Nazri said that the market would watch closely the the US Federal Reserve’s decision on a possible interest rate cut at the July meeting.

“The US Fed is expected to meet on July 30 and 31, and investors are waiting for the announcement whether an interest cut is taking place or not,” he said.

For next week, among the stocks to look at are Sunway Construction Group Bhd (construction) and Hartalega Holdings Bhd (healthcare).

For the week just ended, the FBM KLCI index erased 10.23 points to 1,647.96 from 1,656 last Friday.

Trading in the week was influenced by the Wall Street performance, the highly anticipated ECB rate cut, as well as the Federal Open Market Committee meeting.

The FBM Emas Index declined 91.80 points to 11,698.42, the FBMT 100 Index depreciated 96.59 points to 11,519.66 and the FBM Emas Shariah Index trimmed 104.37 points to 12,060.49.

The FBM 70 weakened 225.15 points to 14,687.88 but the FBM Ace Index gained 89.80 points to 4,764.77.

Sector-wise, the Financial Services Index slid 277.93 points to 16,317.95, the Plantation Index dipped 35.37 points to 6,778.63 and the Industrial Products and Services Index inched down 1.02 points to 155.79.

Weekly turnover fell to 13.96 billion units worth RM9.90 billion versus 15.49 billion units worth RM9.46 billion last week.

Main Market volume decreased to 9.25 billion shares valued at RM9 billion against 10.83 billion shares worth RM8.27 billion.

Warrants turnover rose to 2.36 billion units worth RM486 million vis-a-vis 1.99 billion units worth RM391.59 million.

The ACE Market volume fell to 2.34 billion shares valued at RM411.64 billion from 2.66 billion shares worth RM486.93 million. — Bernama