Bursa Malaysia to consolidate, 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 1,730 levels.

Malacca Securities Analyst Kenneth Leong said any upside bias is likely to be kept at the 1,730 level with the US non-farm payroll figures revealed on Friday being positive.

Leong told Bernama the market focus would also be now on the Federal Reserve (Fed) policy meeting on March 14-15 and expects interest rates to be increased this month.

For the week just ended, Bursa Malaysia ended on an uptrend on Monday and Friday, but remained in the red for the rest of week on a lack of impetus.

Leong said it traded sideways in cautious mode as investors awaited clues on the possible US interest rate hike.

On a week-to-week basis, the FBM KLCI rose 9.2 points to 1,717.58 from 1,708.38 last Friday.

The FBM Emas Index gained 78.03 points to 12,135.62, the FBMT 100 Index gained 62.06 points to 11,798.37 and the FBM Emas Syariah Index improved 60.91 points to 12,559.68.

On a sectoral basis, the Finance Index surged 111.51 points to 15,400.07, the Industrial Index rose 6.79 points to 3,243.24, while the Plantation Index shed 13.32 points to 8,081.19

Weekly turnover expanded to 16.23 billion units worth RM13.66 billion from 14.89 billion units worth RM13.07 billion.

Main Market volume marginally narrowed to 10.3 billion shares valued at RM13.04 billion against 10.76 billion shares valued at RM12.42 billion last Friday.

Warrant turnover rose to 1.25 billion units worth RM155.47 million from 1.19 billion units worth RM162.86 million.

The ACE Market declined to 2.67 billion shares worth RM459.75 million from 2.91 billion shares worth RM481.58 million.
Gold futures contracts on Bursa Malaysia Derivatives are expected to trade cautiously with a limited upside next week.
Phillip Futures Sdn Bhd Dealer Tee Guy Eon said analysts expect further losses as the market becomes increasingly certain that US interest rates would rise this month.

"We expect the gold market to continue to trade cautiously with a limited upside ahead of the US Federal Reserves Open Market Committee (FOMC) meeting on March 14-15," he added.

The Fed's interest rate decision will be announced on March 16 and be highly anticipated by market watchers, Tee said.

Higher interest rates typically pressure gold prices because it raises the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.

For the week just ended, the market was thinly traded. Volume dwindled as investors awaited more market catalysts and give the market direction.

On a Friday-to-Friday basis, March 2017 fell 30 ticks to RM172.50, April 2017 declined 34 ticks to RM172.00, while May 2017 and June 2014 declined 26 ticks each to RM173.00 and RM173.20 per gramme respectively.

Turnover for the week slid to 21 lots worth RM363,600 from 107 lots worth RM2.37 million last week.

Open interest on Friday was lower at 335 contracts from the 344 contracts recorded previously. — Bernama