Bursa Malaysia to be higher next week on window dressing

KUALA LUMPUR: Shares on Bursa Malaysia will likely be on an uptrend next week due to window dressing activities ahead of the year-end, says an analyst.

The analyst expects the FTSE Bursa Malaysia KLCI (FBM KLCI) to rise towards the 1,700-point level next week, from the current level of 1,670.28.

“However, there is still a risk of a last-minute pullback by traders given the overall bearish regional sentiment right now,” he told Bernama.

Meanwhile, Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid has a more conservative view of the FBM KLCI, predicting that it would linger around the current support level of 1,653.

He said local funds are expected to begin their window dressing activities next week but trading would still be done cautiously.

“The expected increase in US rates next year will likely have an impact on their growth and this would reverberate to the global economy as monetary tightening will take some time to have an impact on the real economy,” he added.

For the week just ended, the FBM KLCI performed poorly driven by the sharp decline in US stocks, as market players turned cautious due to signs of a slowing global economy and the Federal Reserve’s decision to increase interest rates by 25 basis points.

On a Friday-to-Friday basis, the benchmark FBM KLCI settled 8.32 points better at 1,670.28.

The FBM Emas Index gave up 48 points to 11,371.11, the FBMT100 Index erased 28.51 points to 11,289.02, the FBM 70 dropped 367.17 points to 12,826.39, the FBM Emas Shariah Index fell 29.61 points to 11,318.67, and the FBM Ace edged down 131.50 points to 4,258.61.

Sector-wise, the Finance Index lost 214.22 points to 17,143.54, the Industrial Products and Services Index slipped 1.33 points to 165.47, while the Plantation Index increased 162.60 points to 6,810.26.

Comparing Friday-to-Friday, the weekly turnover increased to 9.57 billion units worth RM8.45 billion from 9.21 billion units worth RM7.85 billion last Friday.

Main Market volume rose to 6.62 billion units worth RM7.93 billion from 6.47 billion units worth RM7.30 billion.

Warrants turnover eased to 1.70 billion units worth RM384.90 million from 1.74 billion units worth RM400.27 million.

The ACE Market volume improved to 1.01 billion shares worth RM137.63 million from 997.58 million shares worth RM153.66 million previously.

The gold futures contract on Bursa Malaysia Derivatives is expected to trade higher next week on the weakness of the US dollar, a dealer said.

Phillip Futures Sdn Bhd Dealer Stephen Lou Yoke Lim said the US dollar is expected to be jittery next week given the uncertainty in the US market.

“Investors may abandon risky assets and flock back to the safe-haven assets,” he told Bernama.

The market will be closed on Tuesday for Christmas.

For the week just ended, the US Federal Reserve shocked the market, taking a less dovish stance by raising interest rates by 25 basis points and trimming its median forecast from three to two hikes next year.

The US dollar strengthened after the announcement but later retreated, thus lending strength to most developing world currencies.

On a Friday-to-Friday basis, spot month December 2018, January 2019, February 2019 and March 2019 all added 44 ticks each to RM169.20, RM169.20, RM169.30 and RM169.40 a gramme respectively.

Weekly turnover increased to two lots worth RM33,500 from one lot worth RM16,700 in the previous week, while open interest remained at 26 contracts. — Bernama