FBM KLCI to trend higher next week on improved sentiment

KUALA LUMPUR: Bursa Malaysia is likely to trend higher next week with the benchmark FTSE Bursa Malaysia (FBM KLCI) hitting the 1,700 level.

This is largely due to the sentiment arising from US President Donald Trump's protectionist trade policy which has helped clear investor uncertainties.

Affin Hwang Investment Bank Vice-President/Head of Retail Research Datuk Dr Nazri Khan Adam Khan, said Trump's economic plans and his protectionist approach to trade as well as policies on corporate taxes and regulations, would set a better tone for the equity markets.

"Modest recovery in global risk sentiment and commodity prices, especially global oil prices, will also contribute to the rise on the local bourse next week," he told Bernama.

Nazri said regional and local bourses would also continue to watch Wall Street's performance for further clues.

Earlier in the week, Trump signed an executive order withdrawing the United States from the Trans-Pacific Partnership Agreement(TPPA), and this weighed on the sentiment of regional markets, including Malaysia.

Gains on Bursa Malaysia also lost momentum and trading volume vaporised on Friday as investors took off for the long holiday break ahead.

The FBM KLCI traded tepidly between 1,660-1,690 points this week, especially with the Chinese New Year festival around the corner.

For the week just-ended, the local index traded mostly lower.

On a week-to-week basis, the FBM KLCI rose 21.47 points to 1,686.36 from 1,664.89 last Friday.

The FBM Emas Index bagged 160.11 points to 11,828.66, the FBMT 100 Index increased 159.84 points to 11,532.38 as the FBM Ace fell 46.03 points to 4,939.77 and the FBM 70 surged 237.86 points to 13,584.80.

The FBM Emas Syariah Index garnered 162.64 points to 12,320.58.

On a sectoral basis, the Finance Index perked 175.81 points to 14,883.02, the Plantation Index increased 37.78 points to 7,952.90 and the Industrial Index rose 128.49 points to 3,254.02.

Weekly turnover fell to 6.85 billion units worth RM8.60 billion from 9.1 billion units worth RM8.25 billion last Friday.

Main market volume narrowed to 4.71 billion shares valued at RM18.29 billion from 6.08 billion shares valued at RM7.74 billion.

Warrant turnover advanced to 904.75 million units worth RM109.29 million from 766.61 million units worth RM116.42 million.

The ACE market declined to 1.20 billion shares worth RM200.59 million from 2.24 billion shares worth RM392.54 million.
The gold futures contracts on Bursa Malaysia Derivatives is likely to be quiet next week as investors gradually return to the market after a long weekend due to the Chinese New Year holiday, said a dealer.

Phillip Futures Sdn Bhd Dealer Tee Guy Eon said the upside for Bursa gold is expected to be limited, tracking its US counterpart, COMEX gold, with the greenback having gained significant strength from President Donald Trump's policies.

The gold market was traded mostly higher in the week just ended and the market closed at half-day trading on Friday due to the Lunar New Year celebration.

The Bursa gold market will resume on Tuesday.

On a Friday-to-Friday basis, January 2017 declined 15 ticks to RM170 a gramme, February 2017 fell 10 ticks to RM170.5 a gramme, March 2017 went down nine ticks to RM171 a gramme and April 2017 depreciated five ticks to RM171.25 a gramme.

Weekly turnover declined to 34 lots worth RM585,800 versus 62 lots worth RM1.07 million last week.

Open interest on Friday was higher at 280 contracts from 263 contracts previously. — Bernama