Bursa Malaysia to trend higher, test 1,800 level next week

KUALA LUMPUR: Bursa Malaysia is expected to trend higher next week on improved global sentiment and a stronger ringgit with the benchmark index inching upwards to test the 1,800 level.
Affin Hwang Investment Bank Vice-President/Head of Retail Research Datuk Dr Nazri Khan Adam Khan, said with a stronger ringgit coupled with encouraging gross domestic product growth of 5.6% for the first quarter of this year, the local market sentiment was expected to remain positive and this would continue to support the local bourse.
"The ringgit is hovering around its six-month high on the back of steady inflow of demand for the local currency," he told Bernama.
For the week just ended, the local bourse had consolidated within the range 1,760 and 1,770 with a declining trading volume due to terror attack in Manchester, England but it is expected to move upwards to test the 1,800 level next week on improved sentiment.
Nevertheless, he said Bursa Malaysia would still keep track on global equities performance for further clues.
Additionally, the US stock market which closed at an all-time high, as well as the Federal Reserve's indication to increase interest rate in June would also brought about positive sentiment to the market, he said.
He added that the fall in crude oil prices on Friday affected by market expectation of larger supply cut despite the major oil producing countries' agreement to extend supply cut was expected to be temporary.
Crude oil prices was expected to be steady at above US$50 a barrel next week and this would also set a better tone for Bursa Malaysia.
For the week just-ended, the local bourse traded mixed, taking cues from Wall Street performance as well as the crude oil prices.
On a week-to-week basis, the FBM KLCI rose 4.02 points to 1,772.30, the FBM Emas Index shed 24.3 points to 12,661.58, the FBMT 100 Index declined 12.81 points to 12,294.36 and the FBM Emas Syariah Index decreased 24.3 points to 12,661.58.
The FBM 70 fell 168.46 points to 15,145.50 and the FBM Ace dropped 214.83 points to 6,386.88.
On a sectoral basis, the Finance Index surged 144.54 points to 16,499.86, the Industrial Index was 13.71 points higher at 3,275.93 but the Plantation Index eased 1.54 points to 8,064.46 .
Weekly turnover fell to 16.20 billion units valued at RM14.43 billion from 16.98 billion units worth RM15.60 billion recorded last week.
Main Market volume decreased to 10.45 billion shares valued at RM13.56 billion from last week's 11.30 billion shares worth RM14.71 billion.
Warrants volume fell to 1.84 billion units worth RM239.50 million from 1.96 billion units valued at RM268.02 million.
The ACE Market turnover, however, rose to 3.85 billion units worth RM536.27 million from 3.70 billion units valued at RM611.29 million.
Gold futures contract on Bursa Malaysia Derivatives (BMD) is expected to have an upside bias, without factoring any unprecedented geopolitical risks anomalies occurring that could possibly boost safe-haven appeal further.
Phillip Futures Sdn Bhd Dealer, Ler Wee Liang, said he expected Bursa gold futures to be bullish, tracking the movement of New York Commodity Exchange's gold futures next week, provided the latter were able to continue their upside strength.
"In the week ahead, should any geopolitical risks in the US or elsewhere escalate, gold prices are expected to surge higher," he told Bernama, today.
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.
On a Friday-to-Friday basis, gold futures on Bursa Malaysia for May 2017 declined three ticks to RM174 a gramme, while June 2017, July 2017 and August 2017 advanced eight ticks each to RM174.65 a gramme, RM175.05 a gramme and RM175.55 a gramme.
Turnover for the week was lower at 40 lots worth RM678,000, from the 62 lots worth RM1.08 million recorded last week, while open interest rose to 271 contracts from 265 contracts previously. — Bernama