KUALA LUMPUR, Sept 14 — Bursa Malaysia is expected to edge higher towards the 1,620 level next week, driven by positive domestic economic performance and Wall Street sentiment, renewed optimism over the breakthrough in the US-China trade war talks and positivity surrounding European Central Bank’s (ECB) move to launch a stimulus package.
Phillip Capital Management senior vice-president (investment) Datuk Nazri Khan Adam Khan said the FBM KLCI showed resilience after the ECB announced it was cutting interest rates and starting a new bond-buying programme.
The ECB cut its main deposit rate by 10 basis points to -0.5 per cent and introduced the bond-buying programme, which will entail 20 billion euros per month of asset purchases for as long as it deems necessary.
On the technical front, Nazri said the FBM KLCI continued to hover above 1,600 points, an indication that the ongoing recovery seen since May was still in play.
Hence, he expects to see positive follow-through towards the 1,660-point resistance in the near-term outlook and, should the local bourse clear this level, the next resistance is at 1,700 points.
Overall, the local investors remain bullish following the ECB stimulus, reduced US-China trade hostilities and the stable domestic economic data, Nazri said.
“Besides, Bank Negara Malaysia (BNM) has resisted an interest rate cut on the back of a slowing economy while key central banks across Asia-Pacific have been slashing their benchmark rates recently.
“BNM’s Monetary Policy Committee decided (on Thursday) to retain the overnight policy rate at 3.00 per cent after a dovish tone amid a myriad of factors, particularly the US-China trade war that would slow down the domestic economy,” he added.
On Friday, the local market closed slightly higher on last-minute buying, after hovering in the red most of the day.
On a week-on-week basis, the benchmark FBM KLCI weakened 3.22 points to 1,601.25 from last week’s close of 1,604.47.
The market was closed on Monday for the Yang di-Pertuan Agong’s birthday and will be closed again in the coming Monday for Malaysia Day.
The FBM Emas Index increased 30.21 points to 11,311.33, the FBMT 100 Index rose 25.40 points to 11,146.06 and the FBM Emas Shariah Index went up 5.81 points to 11,832.1.
The FBM 70 jumped 229.44 points to 14,017.89 and the FBM Ace Index edged up 99.63 points to 4,557.01.
Sector-wise, the Financial Services Index gained 92.58 points to 15,571.75 and the Industrial Products and Services Index inched up 30.21 point to 152.64, while the Plantation Index expanded by 18.23 points to 6,825.17.
Weekly turnover increased to 8.52 billion units worth RM6.95 billion from 8.27 billion units worth RM6.34 billion.
Main Market volume expanded to 5.514 billion shares valued at RM6.29 billion compared to 5.07 billion shares valued at RM6.29 billion in the previous week.
Warrants turnover was slightly higher at 1.754 billion units worth RM348.93 million against 1.73 billion units worth RM396.75 million previously.
The ACE Market volume declined to 1.24 billion shares valued at RM242.79 million from 1.48 billion shares worth RM263.66 million. — Bernama