Bursa likely to stage oversold rebound next week

KUALA LUMPUR: Bursa Malaysia is expected to stage an oversold rebound next week ahead of the Hari Raya holidays driven by a recovery in the ringgit, says Affin Hwang Investment Bank Vice-President and Head of Retail Research Datuk Dr Nazri Khan.
He said the local bourse will also get some support from a rebound in the oil price coupled with reduced concern over Greece and China's market meltdown.
"Volatility however is anticipated to remain high due to the Greece negotiation process, bond yield movement and anticipation of an interest rate hike by the US Federal Reserve," he told Bernama.
On the domestic front, Nazri noted that all sectors rallied strongly led by finance and technology will propel the FBM KLCI back into positive territory next week.
"Reduced concerns over Greece leaving the Eurozone and a rise in commodity prices (Brent crude oil up 2.6% to US$58.54) promote bullish sentiments on the ringgit as outflows of funds shrink compared to last month.
"We note that the ringgit has improved 1.3% after falling to a 10-year historic low of 3.833 last week.
"However, Fitch Ratings' decision to pull back from downgrading Malaysia will eventually strengthen the ringgit as Malaysia reinforces its fiscal credentials," he added.
Meanwhile, for the week just ended, sentiment was depressed on the first three days, with the benchmark falling below the 1,700-level but managing to recover on Thursday and Friday on domestic buying.
The FTSE Bursa Malaysia KLCI finished slightly lower at 1,715.58, down 18.66 points from last Friday's 1,734.24.
The FBM Emas Index contracted 156.37 points to 11,802.08, the FBMT100 Index went down 148.15 points to 11,496.65 and the FBM Emas Shariah Index depreciated 153.00 points to 12,278.07.
The FBM 70 trimmed 249.07 points to 12,687.34 while the FBM Ace dropped 181.32 points to 6,112.48.
Sector-wise, the Finance Index gave up 530.34 points to 15,392.07, the Industrial Index fell 40.79 points to 3,161.95 but the Plantation Index inched up 6.94 points to 7,468.78.
Weekly turnover added to 8.73 billion units worth RM8.89 billion, from 8.27 billion units worth RM9.37 billion traded previously. Main market volume rose to 4.87 billion units valued at RM7.70 billion, versus 4.75 billion units valued at RM8.39 billion last Friday.
Warrant turnover widened to 2.52 billion units worth RM830.23 million, against last week's 848.35 million units worth RM1.76 billion.
The ACE market narrowed to 1.32 billion shares worth RM355.69 million, from 1.49 billion shares valued at RM608.59 million. – Bernama