Bursa Malaysia to consolidate and trend sideways next week

KUALA LUMPUR: Bursa Malaysia is likely to consolidate and trend sideways next week, with the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) moving between the 1,700 and 1,720 levels.

Affin Hwang Investment Bank Vice-President/Head of Retail Research Datuk Dr Nazri Khan Adam Khan said the market is also expected to be cautious next week after trading quite strongly for the past two weeks.

"The market focus will now be on the Federal Reserve (Fed) policy meeting on March 14-15, where there is an increasing chance that US interest rates would be increased in March," he told Bernama.

Nazri said the technical indicator is also showing a weaker momentum which will result in further market consolidation.

However, he said the market will be cushioned by the good news brought on by Malaysia and Saudi Arabia's good economic collaboration, plus healthy macro data, with leading economic indicators having shown an increase of 0.9%.

For the week just ended, the local bourse traded sideways in cautious mode as investors awaited US President Donald Trump's first speech before a joint session of Congress on Wednesday.

The local market was lifted higher on Thursday as investors viewed Trump's speech positively and took cue from Wall Street which saw trading at record highs.

Bursa Malaysia, however, retreated on Friday to end the week lower on profit taking.

On a week-to-week basis, the FBM KLCI rose 10.03 points to 1,708.38 from 1,698.35 last Friday.

The FBM Emas Index gained 82.08 points to 12,057.59, the FBMT 100 Index gained 83.76 points to 11,736.31 and the FBM Emas Syariah Index jumped 108.51 points to 12,498.77.

On a sectoral basis, the Finance Index surged 160.86 points to 15,288.56, and the Plantation Index improved 24.16 points to 8,094.51, while the Industrial Index slipped 48.83 points to 3,236.45.

Weekly turnover expanded to 14.89 billion units worth RM13.07 billion from 13.88 billion units worth RM 12.59 billion.

Main Market volume widened to 10.76 billion shares valued at RM12.42 billion against 10.12 billion shares valued at RM11.92 billion.

Warrant turnover rose to 1.19 billion units worth RM162.86 million from 1.06 billion units worth RM147.99 million.

The ACE Market increased to 2.91 billion shares worth RM481.58 million from 2.35 billion shares worth RM511.03 million.
Gold futures contracts on Bursa Malaysia Derivatives are expected to be on a downtrend next week with the market hit by the heightened prospect of a Fed rate hike this month, a dealer said.

Phillip Futures Sdn Bhd Dealer Leo Goh Boon Hao said the precious metal was vulnerable towards interest rates, as it could increase the opportunity cost of holding non-interest-bearing gold.

"Based on the past two historical rate actions, gold prices are expected to trade in negative sentiment and stabilise after the Federal Open Market Committee meeting on March 14-15," he told Bernama.

On a Friday-to-Friday basis, March 2017 fell 76 ticks to RM174, April 2017 declined 82 ticks to RM173.70, May 2017 declined 66 ticks to RM174.30 and June 2017 shed 68 ticks to RM174.50 per gramme.

Turnover for the week slid to 107 lots worth RM2.37 million from 159 lots worth RM2.85 million last week.

Open interest on Friday was higher at 344 contracts from the 437 contracts recorded last week. — Bernama