KLCI futures likely to trade in line with cash market next week

The FTSE Bursa Malaysia KLCI futures contract on Bursa Malaysia Derivatives is expected to move in line with the underlying cash market next week. — Bernama pic
The FTSE Bursa Malaysia KLCI futures contract on Bursa Malaysia Derivatives is expected to move in line with the underlying cash market next week. — Bernama pic

KUALA LUMPUR, Aug 8 — The FTSE Bursa Malaysia KLCI futures contract on Bursa Malaysia Derivatives is expected to move in line with the underlying cash market next week. 

Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said the main focus for next week would be the release of Malaysia’s second-quarter 2020 gross domestic product data on Friday, which was expected to show further decline due to the impact of the movement control order.

“Nevertheless, we believe that the market has somewhat priced this in. 

“We still expect the benchmark index to trade between the range of 1,550 to 1,600 next week, unless there are new positive catalysts such as a breakthrough in vaccine development for Covid-19,” he told Bernama. 

Meanwhile, Rakuten Trade Sdn Bhd head of research Kenny Yee Shen Pin said rotational play among targeted stocks would likely dominate the market sentiment with trading volumes to remain high for counters included in the benchmark index. 

“We think the market will probably go through a similar trend against the backdrop of heightened US-China trade tension, including on the technology issue,” he said.

From Thursday last week (the market was closed on Friday) to Friday this week, new spot month August 2020 fell 32.5 points to 1,578.50, September 2020 shed 32 points to 1,571.00, December 2020 declined 31.0 points to 1,563.00, and distant month March 2021 remained at 1,548.50. 

Turnover dropped to 56,197 lots versus 106,658 lots in the previous week, while open interest widened to 34,397 contracts from 53,310 contracts previously.

Over the eight-day period, the FBM KLCI fell 25.61 points to end at 1,578.14 from 1,603.75 on Thursday last week.

Bursa Malaysia Bhd and its subsidiaries were closed on Friday, July 31, for the Hari Raya Aidiladha celebration. — Bernama

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