Anticipation on fresh catalysts to pressure Bursa M’sia next week

16 Mar 2019 / 10:06 H.

KUALA LUMPUR: The lower performance of US equities at the end of the trading week, a decline in the benchmark Brent crude, as well as an anticipation of fresh catalysts during Invest Malaysia, will weigh on Bursa Malaysia next week.

Phillip Capital Management Senior Vice President (Investment) Datuk Dr Nazri Khan said US equities closed lower on last Thursday after a revisit towards the S&P 500’s November highs on trade war updates, while US Treasuries slid, and Brent crude dropped a dollar from the four-month peak to halt an incline in European energy stocks.

“Going forward, we maintain our view on Bursa Malaysia next week to trend lower towards the 1,650 level,” he said.

The local bourse is expected to remain sluggish after recent weak earnings reports by local companies and from the fundamentals perspective.

According to Nazri, the gloomy performance is expected to extend further, given that the employment rate has shown a three per cent decline year-on-year.

“From the investors’ perspective, we see this as a minor correction, with the market giving a discount to buyers in line with the fact that foreign companies are showing rising confidence in Bursa Malaysia. This will cushion the internal weak performance after the negative earnings reports.

“For next week’s outlook, investors should avoid seasonal sectors, and focus more on consumer products and energy sectors,” he said.

Meanwhile, Maybank Investment Bank chartist Nik Ihsan Raja Abdullah said there is a possibility of profit taking in third liners, based on their performance in the week just ended.

“I don’t anticipate a big movement next week, with the FBM KLCI trading between 1,670 to 1,690 as the market awaits new catalysts, which Prime Minister Tun Dr Mahathir Mohamad is expected to provide in his speech during Invest Malaysia, which can be deemed as providing more clarity to the market,” he added.

On a Friday-to-Friday basis, the FBM KLCI settled 0.64 of-a-point better at 1,680.54.

The FBM Emas Index gained 19.95 points to 11,759.18, the FBMT 100 Index increased 12.24 points to 11,602.72 and the FBM Emas Shariah Index rose 10.26 points to 11,748.08.

The FBM 70 jumped 47.29 points to 14,209.07 and the FBM Ace Index soared 144.12 points higher at 4,834.45.

Sector-wise, the Financial Services Index improved 44.72 points to 17,537.11, the Industrial Products and Services Index inched up 1.44 points to 170.70 and the Plantation Index eased 7.95 points to 7,256.19.

Weekly turnover increased to 19 billion units worth RM13.22 billion from 14.55 billion units worth RM11.43 billion.

Main Market volume appreciated to 15.25 billion shares valued at RM12.36 billion from 10.47 billion shares valued at RM10.53 billion.

Warrants turnover inched down to 2.14 billion units worth RM449.56 million versus 2.65 billion units worth RM577.32 million.

The ACE Market volume was slightly higher at 1.45 billion shares worth RM356.27 million against 1.42 billion shares valued at RM316 million.

The gold futures contracts on Bursa Malaysia Derivatives are likely to trade higher next week on expectations of the US dollars depreciation.

Phillip Futures Sdn Bhd dealer Lee Pei Wan said continuous signs of global uncertainties are also set to encourage better demand for gold.

On Friday, the greenback declined 0.2 per cent against its major rivals ahead of the Federal Open Market Committee meeting next week, as investors awaited the latest decision on US interest rates.

For the week just ended, the local gold futures was mostly higher on concerns over Brexit and not so rosy data from the US further heightened concerns over a global economic slowdown.

On a Friday-to-Friday basis, spot month March 2019, April 2019 and May 2019 rose 28 ticks each to RM170.90, RM170.90 and RM171.3 a gramme, while June 2019 added 24 ticks to RM171.60 a gramme.

Weekly turnover was lower at four lots worth RM68,720 from 12 lots worth RM204,150 in the previous week, while open interest rose to 28 contracts from 24 contracts. — Bernama

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