Bursa Malaysia expected to trend sideways next week

KUALA LUMPUR: Bursa Malaysia is expected to continue to trade sideways next week, with the benchmark index fluctuating between 1,760 and 1,780 points on factors coming from both local and foreign fronts.
Affin Hwang Investment Bank Vice-President and Head of Retail Research, Datuk Dr Nazri Khan Adam Khan, said the market would remain cautious and adopt a wait-and-see attitude, pending the outcome of the annual meeting of central bankers at Jackson Hole, Wyoming, United States.
"All eyes will be on US Federal Reserve Chair, Janet Yellen's speech on Friday (yesterday) which is expected to provide clues for the monetary policy as well as outlook on the interest rates.
"Besides Yellen, whose term as the Fed Chair expires in February 2018, the European Central Bank President Mario Draghi is also giving a speech at the meeting which takes place from Aug 24-26," he told Bernama.
However, Nazri Khan said the domestic factor was still good with the ringgit still holding at below the 4.30 level against the US dollar, and had appreciated by 4.5% from January this year, coupled with steady commodity prices with crude oil hovering above US$50 a barrel and crude palm oil above RM2,500 a tonne.
"Malaysia's Gross Domestic Product growth of 5.8% in second quarter of this year indicates (positive) momentum in economic growth. This is above expectations, considering consensus forecast of about 5.4% among economists.
"I see the local factors to be supporting the market next week, while the external factors have potential to drag it down, prompting the market to move sideways," he added.
For the week just-ended, the benchmark FTSE Bursa Malaysia KLCI fell 7.05 points to 1,769.17 from 1,776.22 last week.
The trading movement was influenced by external development, particularly the movement on Wall Street which took the cue from the three-day meeting in the US and also President Donald Trump's announcement of shutting down the government, if it declined to fund the building of a wall along the US-Mexico border.
Locally, the failed merger between RHB Bank Bhd and AMMB Holdings Bhd had also added to the negative sentiment in the local bourse.
On a weekly basis, the FBM Emas Index was 18.22 points lower at 12,608.00, the FBMT 100 Index decreased 18.07 points to 12,266.19.
The FBM Emas Syariah Index rose 26.63 points to 12,797.51, the FBM 70 jumped 93.72 points to 15,086.63, and the FBM Ace advanced 154.57 points to 6,666.57.
On a sectoral basis, the Finance Index was down by 84.28 points to 16,693.20, the Industrial Index eased 12.52 points to 3,217.76 but the Plantation Index added 36.04 points to 7,861.04.
Total turnover rose to 9.60 billion units valued at RM9.55 billion from 8.30 billion units worth RM8.75 billion.
Main Market volume swelled to 5.8 billion shares valued at RM8.71 billion from 4.83 billion shares worth RM7.91 billion.
Warrants volume eased to 1.1 billion units valued at RM148.80 million versus 1.30 billion units worth RM180.59 million.
The ACE Market turnover rose to 2.65 billion shares valued at RM679.78 million compared with 2.10 billion shares worth RM644.49 million.
Gold futures contract on Bursa Malaysia Derivatives is expected to see range-bound trading with thin volume due to the shortened trading days next week.
Phillip Futures Sdn Bhd Dealer, Viola Yong, said most traders would be away from the market for the holiday-shortened week, resulting in sluggish trading.
"However, any hints from the annual Jackson Hole Economic Policy Symposium in the United States this week will set the direction for Bursa gold market next week," Yong told Bernama.
Malaysia will be celebrating its National Day on Aug 31, followed by Hari Raya Aidiladha on Sept 1, 2017 which falls on Thursday and Friday, respectively.
For the week just-ended, the gold market traded mostly lower to mixed, mainly tracking the performance of the US Commodity Exchange's (COMEX) gold futures market and the global political uncertainty.
On a Friday-to-Friday basis, August 2017, September 2017, October 2017 and November 2017 fell 20 ticks each to RM176.80, RM176.60, RM176.10 and RM176.30 a gramme, respectively.
Weekly turnover decreased to 15 lots worth RM265,070 from 31 lots worth RM548,706 in the previous week.
Open interest fell marginally to 209 contracts from 210 contracts previously. — Bernama