Bursa Malaysia expected to trade range-bound next week on continued cautious sentiment

KUALA LUMPUR, Jan 22 —  The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) is expected to be range-bound next week as investor sentiment is likely to remain cautious although bargain hunting may prevail, said an analyst.

Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng expects the FBM KLCI to hover within the 1,520-1,540 range going forward.

Commenting on Bank Negara Malaysia’s recent decision to maintain the overnight policy rate at 1.75 per cent, he said that “it’s good to maintain a low interest rate during the economic recovery period. It gives some buffer space for people to prepare for a possible hike in the near future,” he told Bernama.

On Friday, the Department of Statistics announced that the consumer price index (CPI) in December 2021 increased 3.2 per cent to 124.5 against 120.6 in the same month of the preceding year due to the rise in food and fuel prices.

Chief statistician Datuk Seri Mohd Uzir Mahidin said the increase also surpassed the average inflation rate from 2011 to 2021 of 1.9 per cent.

During the week just ended, Bursa Malaysia trended lower, tracking regional markets amid heightened market volatility in the region.

The market was closed on Tuesday for the Thaipusam public holiday.

On Monday, local technology stocks were under selling pressure as concerns over interest rate hikes in the United States and overstretched valuations continued to put pressure on the sector.

Meanwhile, oil prices hit their highest level in more than seven years on Tuesday as traders were worried that the attack on a fuel storage facility in the UAE would affect supply.

Brent crude rose almost 1.0 per cent to hit US$87.22 a barrel. Price rises were even steeper in the US, where the West Texas Intermediate crude increased by 1.3 per cent to US$84.89 a barrel.

On a Friday-to-Friday basis, the FBM KLCI fell 28.27 points to end the week at 1,527.06 from 1,555.33 last week.

On the index board, the FBM Emas Index was down 219.27 points to 10,959.25, the FBMT100 Index erased 220.20 points to 10,665.45, and the FBM Emas Shariah Index lost 219.61 points to 11,661.20.

The FBM 70 dropped 377.74 points to 13,474.83, and the FBM ACE shrank 155.11 points to 6,124.52.

Sector-wise, the Financial Services Index fell 375.47 points to 15,776.61, the Plantation Index eased 62.27 points to 6,699.28, and the Energy Index reduced 12.21 points to 725.88.

The Industrial Products and Services Index dipped 2.13 points to 200.83, the Technology Index inched down 2.71 points to 80.43, and the Healthcare Index shed 56.49 points to 2,189.01.

Weekly turnover decreased to 12.18 billion units worth RM8.85 billion from 21.25 billion units worth RM12.22 billion in the previous week.

The Main Market volume was lower at 7.78 billion shares worth RM7.79 billion versus 12.53 billion shares worth RM10.69 billion.

Warrants volume fell to 1.17 billion units worth RM125.24 million from 1.25 billion units worth RM160.36 million previously.

The ACE Market volume slipped to 3.21 billion shares worth RM919.50 million from 7.43 billion shares worth RM1.35 billion in the previous week. — Bernama