Bursa Malaysia likely to remain firm next week

KUALA LUMPUR: Trading on Bursa Malaysia is likely to remain firm next week, on the back of good news such as the higher economic growth forecast by the International Monetary Fund (IMF), increased foreign equity inflows, a steadier ringgit and firmer crude oil prices.
Affin Hwang Investment Bank Vice-President/Head of Retail Research, Datuk Dr Nazri Khan Adam Khan said the good news provided fresh catalysts and boosted investor confidence in the local bourse.
"Hence, the FTSE Bursa Malaysia KLCI (FBM KLCI) is expected to stay firm at around the 1,780-level next week," he told Bernama.
Nazri Khan said the IMF’s upgrade of Malaysia's 2017 gross domestic product (GDP) forecast to 4.8% from 4.5% on Monday, had lifted the ringgit to surge as the strongest appreciated currency among Asean countries.
"As of today, we also saw a RM11.2 billion inflow into the local equity market, which is also a good catalyst towards improving the sentiment of investors," he said.
Meanwhile, Nazri Khan also noted that technology-related and the Ace Market stocks might lend support to the local bourse next week, especially after Thursday's announcement of five Malaysian companies being on the list of Forbes 2017 "Best Under A Billion".
"The emphasis on the digital economy recently will also propel the tech- related stocks," he added.
On a Friday-to-Friday basis, the FBM KLCI was higher at the beginning of the week as the revised IMF GDP growth projection lifted sentiment on Bursa Malaysia.
The key index retreated thereafter on Friday, mainly due to profit-taking from the recent gains, coupled with the lack of fresh catalysts after the US Federal Reserve voted to maintain the interest rate at between 1.0%-1.25% on Wednesday.
On a weekly basis, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) gained 8.08 points to 1,767.08 from 1,759.00 last week.
The FBM Emas Index surged 51.62 points to 12,591.63, the FBMT 100 Index rose 52.72 points to 12,232.61 and the FBM Emas Syariah Index was up 9.79 points to 12,729.68. The FBM 70 jumped 57.58 points to 14,973.47, but the FBM Ace lost 138.84 points to 6,616.64.
On a sectoral basis, the Plantation Index was 31.56 points lower at 7,839.79 and the Industrial Index eased 1.13 points to 3,274.01.
The Finance Index, however, advanced 155.24 points to 16,826.38.
Total turnover fell to 7.87 billion units worth RM9.03 billion from 9.96 billion units worth RM10.01 billion last week.
Main Market volume declined to 5.08 billion shares valued at RM8.45 billion versus 6.49 billion shares valued at RM9.26 billion last Friday.
Warrants volume also shed to 580.48 million units valued at RM63.99 million from 742.7 million units worth RM69.76 million.
The ACE Market turnover narrowed to 2.17 billion shares worth RM506.05 million against 2.68 billion shares valued at RM668.58 million.
Gold futures contracts on Bursa Malaysia Derivatives are likely to trade higher next week, taking advantage of the weakened US dollar, as well as tracking the performance of the US Commodity Exchange (Comex) gold futures.
A dealer said Bursa Malaysia gold futures prices would continue the uptrend if the greenback remained low, especially after the US Federal Reserve decided to keep interest rates unchanged.
“The market is eyeing the upcoming US gross domestic product (GDP) data for more clues on monetary policy tightening.
“A stronger-than-expected US GDP would accelerate the pace of the next interest rate hike on the back of a healthier economy, pushing up bond yields and making bullion less attractive,” he added.
For the week just-ended, the gold market traded mostly higher, mainly tracking the performance of the Comex gold market.
On a Friday-to-Friday basis, spot month July 2017 surged 15 ticks to RM173, August 2017 added 11 ticks to RM173.30 a gramme, September 2017 gained 10 ticks to RM173.40, but October 2017 fell 14 ticks to RM172.90 a gramme.
Weekly turnover advanced to 42 lots worth RM725,620 from 26 lots worth RM239,855 last week.
Open interest on Friday was higher at 279 contracts from 234 contracts previously. — Bernama