Bursa Malaysia likely to trend lower next week

KUALA LUMPUR: Bursa Malaysia is expected to trend lower next week driven by falling regional markets on the absence of a stimulus move by the Bank of Japan and relatively hawkish minutes of the US Federal Reserve meeting.
However, Affin Hwang Investment Bank Vice-President and Retail Research Head Datuk Dr Nazri Khan Adam Khan said positive local sentiments would likely support the market.
"These include the appointment of a new Bank Negara Governor which augurs well for the confidence of foreign investors that would lift the ringgit, and the National Transformation Programme (NTP), which has exceeded expectations across the board.
"This (NTP) is reflected in the Gross Domestic Product, which grew an average 5.6% annually from 2010 to 2015 despite the challenging external environment," said Nazri.
On the technical front, the local bourse will trend lower temporarily to correct its overbought situation, he said.
"With the underlying trends of the strengthening ringgit and crude oil prices, we sense a good buy on a weakness investment strategy now, especially on emerging trading interest in Plantation and Oil & Gas stocks," he told Bernama. On a weekly basis, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) fell by 45.24 points to 1,672.72 from 1,717.96 last week.
The FBM Emas Index tumbled 300.47 points to 11,638.02, the FBMT100 Index reduced 293.79 points to 11,334.19 and the FBM Emas Syariah Index was 278.76 points lower at 12,208.99.
On a sectoral basis, the Finance Index dropped 321.35 points to 14,587.30, the Plantation Index eased 40.01 points to 7,710.85 and the Industrial Index slid 96.85 points to 3,174.10.
Weekly turnover leaped to 9.77 billion units valued at RM10.24 billion from 8.6 billion units valued at RM9.25 billion last week.
Main market volume rose to 7.20 billion shares valued at RM9.79 billion from 6.37 billion shares valued at RM8.89 billion previously.
Warrant turnover advanced to 1.01 billion units worth RM130.58 million from 920.23 million units worth RM110.71 million last Friday.
The ACE market increased to 1.54 billion shares valued at RM324.49 million from 1.3 billion shares valued at RM259.39 million last week.
Gold futures contracts on Bursa Malaysia Derivatives are likely to trend upward next week, lifted by the weaker ringgit and changes in investor risk tolerance.
Phillip Futures Sdn Bhd dealer Chua Zheng Liang said the weaker ringgit would push up the ringgit-denominated gold, making it more attractive.
The local note was traded mostly lower for the week just ended.
"Meanwhile, the US Federal Reserve's decision to maintain interest rates has supported bullion while the Bank of Japan's hold on its monetary stimulus has influenced market sentiment," he added.
The moves have shaken investors' confidence in the recovery of the global economic pattern, making them gravitate towards gold as a lower-risk investment.
On a Friday-to-Friday basis, April 2016 added 71 ticks to RM159.95 per gramme, May 2016 increased 67 ticks to RM160.65, June 2016 rose 60 ticks to RM160.50 while July 2016 advanced 66 ticks to RM160.60 per gramme.
Weekly turnover jumped to 130 lots worth RM1.06 million from 34 lots worth RM532,520 last Friday.
Open interest on Friday went up to 569 contracts from 531 contracts previously. — Bernama