Bursa Malaysia to trend higher towards 1,800-1,820 level next week

KUALA LUMPUR: Bursa Malaysia is expected to trend higher towards the 1,800-1,820 level next week, after retreating back to 1,750 level this week on heavy selling in the heavyweights due to overreaction to the debt level announcement, dealers said.
Hermana Capital Bhd Chief Executive Officer and Chief Investment Officer Datuk Dr Nazri Khan Adam Khan said the government's recent announcement that the national debt exceeded RM1 trillion sparked concern among investors on its ability to manage economy.
However, he said the concern began to subside after the government announced a series of plans to generate income, including promising to review all mega projects and adopting cost-cutting measures.
"As we can see, their (investors) overreaction has found a relief, which saw the local index rebounded to as high as 23 points on Friday.
"Chinese investors's recent statement, in which they expressed confidence and looking forward to continue their businesses under the new government, has also provided some support to the market and would likely continue well into next week," he told Bernama.
However, he said that the global economic tension would likely limit the local market gains next week, with regional investors watching closely on the development of the US-China trade talks.
"There are also renewed concerns among investors after US President Donald Trump cancelled his upcoming summit with North Korean leader Kim Jong Un," he added.
For the week-just-ended, Bursa Malaysia closed mostly lower on sustained selling momentum in selected heavyweights, as well as situational counters.
Bursa Malaysia started off the first day of trading mixed, before beginning to retreat between Tuesday and Thursday, after Finance Minister Lim Guan Eng announced that the national debt had exceeded RM1 trillion or 65 per cent of gross domestic product.
On a Friday-to-Friday basis, the benchmark FTSE Bursa Malaysia KLCI was 57.10 points lower at 1,797.40 from 1,854.5.
The FBM Emas Index eased 322.44 points to 12,540.78, the FBMT100 Index lost 314.68 points to 12,348.68, the FBM 70 slid 111.75 points to 14,840.62, and the FBM Emas Syariah Index fell 337.34 points to 12,608.30.
The FBM Ace declined 195.49 points to 5,189.61.
On a sectoral basis, the Finance Index dropped 448.73 points to 17,879.56, the Industrial Index went down 90.48 points to 3,213.41 and the Plantation Index reduced 78.13 points to 7,844.11.
Weekly turnover narrowed to 12.90 billion units worth RM15.95 billion from 20.14 billion units worth RM21.61 billion.
Main market volume decreased to 8.17 billion shares worth RM15.19 billion from 13.97 billion shares worth RM20.6 billion.
Warrants turnover declined to 3.07 billion units valued at RM519.62 million versus 3.67 billion units valued at RM523.83 million.
The ACE market volume reduced to 1.55 billion shares worth RM233.17 million from 2.46 billion shares worth RM472.54 million.
Gold futures contract on Bursa Malaysia Derivatives is expected to be rangebound next week on lack of market moving news, said a dealer.
Phillip Futures Sdn Bhd dealer Kiang Jia Ling said the market would likely be under pressure, tracking the weak trend overseas over US President Donald Trump's decision to call off a meeting with North Korean leader Kim Jong Un, triggering safe-haven buying.
On a Friday-to-Friday basis, May 2018 jumped 40 ticks to RM167.05 per gramme, while June 2018, July 2018 and August 2018 increased 36 ticks each to RM167.65, RM168.05 and RM168.15 a gramme, respectively.
Weekly turnover decreased to nine lots worth RM150,270 against 18 lots worth RM301,155 from the previous week, while open interest was slightly higher at 49 contracts from last week's 46 contracts. — Bernama