Bursa Malaysia to trend higher next week on improved sentiment

KUALA LUMPUR: Bursa Malaysia is expected to trend higher next week on improved sentiment following a modest recovery in global markets and commodity prices, which has helped clear investor uncertainties.

Affin Hwang Investment Bank Vice-President/Head of Retail Research Datuk Dr Nazri Khan Adam Khan, said regional stock markets, including Malaysia, had steadied, backed by the better performance of Wall Street and stronger economic data for jobs and business activities after a steep sell-off two days ago.

"Trade will shift their focus to local catalysts, as concerns surrounding US politics wanes," he told Bernama, adding, regional bourses and Bursa Malaysia will still watch Wall Street's performance for further clues.

The rebound in crude oil prices will also set a better tone for Bursa Malaysia next week.

On Friday, Brent crude was up 28 cents to US$52.79 per barrel and US crude rose 29 cents to US$49.64 per barrel, on growing optimism that the big producer countries would extend output cuts to curb a persistent glut.

On the local front, Nazri said Malaysia's encouraging gross domestic product data with robust first quarter 2017 growth of 5.6% would also encourage the local bourse.

For the week just ended, the local bourse trended range-bound following the softer tone on Wall Street and political turmoil in the US.

On a week-to-week basis, the FBM KLCI fell 7.59 points to 1,768.28, the FBM Emas Index shed 32.22 points to 12,685.88, the FBMT 100 Index declined 40.83 points to 12,307.17 and the FBM Emas Syariah Index decreased 48.44 points to 13,009.49.

The FBM 70 slid 5.95 points to 15,313.96 and the FBM Ace surged 163.45 points to 6,601.71.

On a sectoral basis, the Finance Index was 55.83 points lower at 16,355.32, the Plantation Index declined 46.79 points to 8,066.00 and the Industrial Index was 3.01 points lower at 3,262.22.

Weekly turnover rose to 16.98 billion units valued at RM15.60 billion from 13.49 billion units worth RM10.82 billion recorded last week.

Main Market volume increased to 11.30 billion shares valued at RM14.71 billion from last week's 8.43 billion shares worth RM10.10 billion.

The ACE Market fell to 3.70 billion units worth RM611.29 million from 3.89 billion units valued at RM564.34 million.

Warrants' turnover, however, rose to 1.96 billion units worth RM268.02 million from 1.11 billion units valued at RM143.90 million.

Gold futures contracts on Bursa Malaysia Derivatives (BMD) are expected to consolidate with an upside bias on geopolitical risks next week, with the unsettled political turbulence in the United States (US) possibly boosting the safe-haven appeal.

Phillip Futures Sdn Bhd Dealer Leo Goh Boon Hao said gold surged 1.46% on a weekly basis, even as the US political scenario boosted demand for safe-haven assets.

"In the week ahead, should any geopolitical risks in the US or elsewhere escalate, gold prices are expected to surge higher," he told Bernama.

Gold is often seen as an alternative investment during times of geopolitical and financial uncertainty, gaining alongside bond yields, while stocks usually take a hit.
The gold futures contract on BMD normally moves in sync with the New York Commodity Exchange’s (Comex) gold market.

On a Friday-to-Friday basis, gold futures on Bursa Malaysia for May 2017 rose 51 ticks to RM174.15 a gramme, June 2017 advanced 48 ticks to RM174.25 a gramme, while July 2017 and August 2017 gained 37 ticks each to RM174.65 and RM175.15 a gramme.

Turnover for the week was higher at 62 lots worth RM1.08 million, from the 30 lots worth RM509,490 recorded last week, while open interest on Friday was higher at 265 contracts from 228 contracts previously.— Bernama