Bursa M'sia expected to recover next week on bargain hunting

KUALA LUMPUR: The FTSE Bursa Malaysia KLCI (FBM KLCI) is likely to rebound next week on bargain hunting due to strong external factors coupled with positive sentiment ahead of Budget 2018.
Affin Hwang Investment Bank Vice-President and Head of Retail Research, Datuk Dr Nazri Khan Adam Khan said shares on Bursa Malaysia had been oversold and after testing its six-month low, the key index would likely fluctuate between 1,750 and 1,760.
"Bursa Malaysia, together with its regional peers would likely track the strong external factors, namely US President Donald Trump's decision to cut tax.
"Investors were expecting to see this move to give positive catalyst especially to the exporters. On top of this, we also hope that the outcome of the Chinese Communist Party's congress would provide some financial or economic clues," he told Bernama.
On the home front, Nazri Khan said although the September inflation rose 4.3 % from a year earlier, it had moderated.
The Sept inflation was driven by higher fuel costs, with the transport index rising 15.8 % from a year earlier, data from the Statistics Department showed.
Headline inflation reached an eight-year high of 5.1 % in March, but had since moderated, the department noted.
Nazri Khan also said higher commodity's prices including the Brent crude, which is trading at above US$55, (RM232) per barrel currently, would lift the market.
As for the 2018 Budget, he said it was going to be a consumer's budget with the government expected to give goodies for public servants as well as increasing the 1Malaysia People's Aid programme to support public spending and boost the economy.
On a weekly basis, the benchmark FTSE Bursa Malaysia KLCI slipped 14.67 points to 1,740.65 from 1,755.32 last Friday.
The FBM Emas Index declined 65.90 points to 12,513.79 and the FBMT 100 Index slid 69.44 points to 12,155.78.
The FBM Emas Shariah Index decreased 364.05 points to 12,513.79, the FBM 70 rose 35.34 points to 15,278.18 and the FBM Ace added 26.63 points to 6,949.37.
On a sectoral basis, the Finance Index dropped 224.52 points to 16,296.10, the Industrial Index fell 25.39 points to 3,190.23 and the Plantation Index declined 44.17 points to 7,922.59.
Total turnover shrank to 11.79 billion units valued at RM9.28 billion from 16.33 billion units valued at RM10.05 billion last week.
Main Market volume dwindled to 6.43 billion shares valued at RM8.35 billion from 9.80 billion shares valued at RM9.06 billion.
Warrants volume eased to 626.73 million units worth RM70.06 million versus 663.12 million units worth RM74.29 million.
The ACE Market decreased to 4.66 billion units valued at RM854.74 million compared with 5.83 billion units valued at RM912.72 million previously.
The gold futures contract on Bursa Malaysia Derivatives is likely to trade in a cautious mode next week, amid a stronger US dollar, said Phillip Futures Sdn Bhd Dealer, Leo Goh Boon Hao.
He said the supporting level for gold futures next week was expected at RM172.50/g.
Demand in the local market would be heavily dependent on the performance of the US Commodity Exchange's (COMEX) gold futures market and the US dollar, he added.
For the week just-ended, gold futures contracts on Bursa Malaysia fell one per cent on a weekly basis, tracking COMEX gold futures as possible US Federal Reserve Chair candidate would shore up the greenback and put pressure on the gold price.
On a Friday-to-Friday basis, spot month October 2017, December 2017 and January 2018 each fell 36 ticks to RM174.10, RM174.30 and RM174.80/g respectively, while November 2017 dropped 56 ticks to RM174.30/g.
Weekly turnover slipped to 23 lots worth RM309,152 from 25 lots worth RM438,106 in the previous week, while open interest widened to 101 contracts from 96 contracts.
The local market was closed on Wednesday for Deepavali. — Bernama