Bursa Malaysia downtrend likely to continue next week

KUALA LUMPUR: The downtrend on Bursa Malaysia is likely to continue next week, with the composite index to remain below the 1,700-points level, weighed by volatility in the external market.

Inter-Pacific Securities Sdn Bhd Head of Research Pong Teng Siew said sentiment in the market would be heavily shaped by market activity (buying/selling) among foreign investors who have expressed concerns over the global investing landscape, especially the progress on the US-China trade tensions.

“I think external developments will have more influence on Bursa as local investors will be very cautious amid news that TH (Lembaga Tabung Haji) is preparing to sell a substantial portion of its portfolio in the market, especially the small-capitalisation stocks.

“We can expect a round of selling to emerge if TH executes its plan,“ he told <i>Bernama</i>.

TH had reportedly said it would reduce exposure in the equity market as part of the pilgrimage fund’s turnaround plan to boost its financials.

“TH’s (decision) will affect local players’ sentiment, because foreign (investors), I believe already have more positive views on Malaysia.

“They realise that Malaysia is one of the few emerging markets that has consistently recorded current account surpluses,“ he said.

By market capitalisation, the pilgrimage fund’s largest exposure currently are in small-capitalisation stocks which account for 53.8%, large-capitalisations constitute 19%, micro-capitalisations (14.8%) and mid-capitalisations (12.4%).

He said the first resistance level for the FTSE Bursa Malaysia KLCI (FBM KLCI) next week would be at 1,669, followed by 1,675 and 1,686, while immediate support levels are at 1,659, followed by 1,655, and 1,644.

“I hope there will be window dressing towards year-end to spike the market and the change in sentiment towards Malaysia among the foreign fund (managers), if it continues, will be a lot more positive than what we have at the moment,“ he pointed out.

For the week just-ended, Bursa Malaysia traded mostly lower on external factors, including investors volatile sentiment on the ongoing US-China trade deal, as well as worries over the growth of the world’s second largest economy.

The local stock market was also influenced by the performances on Wall Street and regional markets, as well as crude oil prices.

On a Friday-to-Friday basis, the benchmark FBM KLCI settled 18.58 points weaker at 1,661.96.

The FBM Emas Index gave up 178.43 points to 11,419.11, the FBMT100 Index erased 162.39 points to 11,317.53, the FBM 70 dropped 329.43 points to 13,193.56, the FBM Emas Syariah Index fell 259.95 points to 11,348.28, and the FBM Ace edged down 294.28 points to 4,390.11.

Sector-wise, the Finance Index lost 77.28 points to 17,357.76, the Industrial Products and Services Index slipped 2.24 points to 166.80, while the Plantation Index decreased 187.45 points to 6,647.66.

Comparing Friday-to-Friday, the weekly turnover contracted to 9.21 billion units worth RM7.85 billion from 10.81 billion units valued at RM9.4 billion recorded last Friday.

Main Market volume dwindled to 6.47 billion units worth RM7.30 billion versus 7.72 billion units valued at RM8.58 billion.

Warrants turnover narrowed to 1.74 billion units worth RM400.27 million from 1.87 billion units valued at RM462.77 million.

The ACE Market volume, however, improved slightly to 997.58 million shares worth RM153.66 million compared with 990.56 million shares valued at RM211.72 million previously. — Bernama