Bursa Malaysia to trade firmer next week

KUALA LUMPUR: Bursa Malaysia is expected to trade firmer next week, boosted by an increase in investor confidence following the better-than-expected gross domestic product (GDP) data for the country released on Thursday.

Affin Hwang Investment Bank Vice President/Head of Retail Research Datuk Dr Nazri Khan Adam Khan said the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) would remain buoyant and touch 1,730.

"The FBM KLCI has been breaching the 1,700-point psychological barrier since Monday. Along with the better economic data, it shows that confidence among investors is improving and this will lift buying momentum," he told Bernama.

Bank Negara Malaysia announced that Malaysia's GDP grew by 4.5% in the fourth quarter of 2016 (4Q16), underpinned by continued expansion in private sector expenditure, leading to a full year growth of 4.2%.

However, Nazri noted that the local stock market would also be influenced by the ringgit and commodity prices, as that of crude palm oil and crude oil.

"If the commodity prices can recover further next week, it will definitely lend support to the local bourse," he said, adding, the ringgit had started to stabilise at 4.45 against the US dollar recently.

Apart from that, he said the US Federal Reserve's (Fed) decision on interest rates would also affect the benchmark index.

"Nevertheless, judging from the statement by Fed Chair Janet Yellen during her testimony before Congress recently, there seems to be no rush to increase interest rates," he added.

For the week-just-ended, the local market saw range-bound trading, helped by trading in heavyweights led-by energy stocks, trade and services and industrial stocks, as well as the better-than-expected GDP data.

On a week-to-week basis, the FBM KLCI gained 8.74 points to 1,707.68 from 1,698.94 last Friday.

The FBM Emas Index surged 57.74 points to 12,021.17, the FBMT 100 Index rose 55.78 points to 11,699.35 and the FBM Emas Syariah Index increased 34.46 points to 12,524.86.

On a sectoral basis, the Finance Index surged 76.28 points to 15,067.0 and the Industrial Index advanced 40.44 points to 3,277.91. But the Plantation Index dropped 68.87 points to 8,146.42.

Weekly turnover expanded to 11.34 billion units worth RM 12.19 billion from 9.74 billion units worth RM9.27 billion.

Main Market volume widened to 8.22 billion shares valued at RM11.62 bilion from 6.99 billion shares valued at RM6.76 billion.

Warrant turnover rose to 872.14 million units worth RM113.42 million from 867.57 million units worth RM120.69 million.

The ACE Market increased to 2.16 billion shares worth RM450.25 million from 1.84 billion shares worth RM377.56 million.
Gold futures contracts on Bursa Malaysia Derivatives are expected to see uncertain trading next week, in tracking the US COMEX gold market and US Federal Reserve's decision on interest rates, said a dealer.

He said the COMEX gold prices are expected to be bearish as the US dollar would probably be boosted on hopes for US President Donald Trump's tax reform plans.

Trump has promised to announce a tax reform in a few weeks' time to ease the burden of businesses in the US.

"Local gold prices will be much affected by that of the benchmark.

"However, the performance of Bursa Malaysia gold will be supported by the weaker ringgit, following Trump's promise of tax reforms," he said.

For the week just ended, the gold market traded mixed.

On a Friday-to-Friday basis, February 2017 rose 48 ticks to RM174.70 a gramme, March 2017 increased 41 ticks to RM174 a gramme, while April 2017 and May 2017 rose 40 ticks each to RM174.50 and RM175.10 a gramme.

Turnover for the week declined to 63 lots worth RM1.09 million from 71 lots worth RM1.22 million last week.

Open interest on Friday was higher at 355 contracts from 323 contracts previously. — Bernama