Bursa Malaysia likely to consolidate next week

KUALA LUMPUR: Bursa Malaysia is expected to consolidate next week with sentiment weighed down by bearish external developments, especially the falling global oil prices.
Affin Hwang Investment Bank Vice-President/Head of Retail Research Datuk Dr Nazri Khan Adam Khan told Bernama that the weak US jobs data and weak manufacturing data in Japan as well as the absence of plans to expand stimulus from the Bank of Japan would hurt investor sentiment.
It was reported that the bank's Governor Haruhiko Kuroda has ruled out the idea of using "helicopter money" -- or directly underwriting the budget deficit -- to combat deflation.
"The downgraded forecast for global growth by the International Monetary Fund to 3.1% in 2016 and 3.4% in 2017 will also dampen investor sentiment in the near term," he said.
On domestic factors, Nazri said the depreciation of the ringgit would also drag down the local bourse's performance.
"Immediate support is expected to be between 1,640 and 1,630 points while key resistance should be at the 1,660 and 1,680-point level," he added.
On a Friday-to-Friday basis, the FBM KLCI fell 10.98 points to 1,657.42 from 1,668.4 recorded last week.
The FBM Emas Index improved 143.52 points to 11,611.17, the FBMT 100 Index rose 131.34 points to 11,307.22 and the FBM Emas Syariah Index was 197.15 points higher at 12,216.36.
On a sectoral basis, the Finance Index fell 172.67 points to 14,101.64, the Industrial Index increased 38.88 points to 3,133.08 and the Plantation Index improved 57.13 points to 7,574.50.
Weekly turnover increased to 8.71 billion units worth RM8.41 billion from 8.18 billion units worth RM9.37 billion last week.
Main market volume rose to 5.80 billion shares worth RM7.89 billion from 5.44 billion shares worth RM8.84 billion previously.
Warrant turnover slid to 1.14 billion units valued at RM166.39 million from 1.22 billion units valued at RM197.75 million last week.
The ACE market increased to 1.75 billion shares worth RM344.53 million from 1.49 billion shares worth RM320.29 million previously.
Gold futures contracts on Bursa Malaysia Derivatives are expected to trend higher next week should the ringgit fail to advance against the US dollar.
"We would expect Bursa gold on Monday and the following week to continue its upward trend, if the ringgit still cannot find its strength," Phillip Futures Sdn Bhd Dealer Chu Ching Yong told Bernama.
The local note was traded lower for the week just ended.
Another dealer said investors remained cautious over the ringgit and other regional currencies ahead of policy meetings in the US and Japan next week.
On a Friday-to-Friday basis, July 2016 and August 2016 each rose 69 ticks to RM172.95 and RM173.25 a gramme respectively, while September 2016 and October 2016 each gained 72 ticks to RM173.90 and RM174.05 a gramme respectively.
Weekly turnover eased to 127 lots worth RM2.19 million from 191 lots worth RM2.39 million last week.
Open interest on Friday advanced to 331 contracts from 320 contracts previously. — Bernama