FBM KLCI expected to test 1,830 next week

September 22, 2018 | By | Reply More

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KUALA LUMPUR: Bursa Malaysia is expected to trend higher next week, with the benchmark index likely to reach 1,830, mainly driven by subsiding uncertainties surrounding the US-China tariff conflict.

Hermana Capital Bhd Chief Executive Officer/Chief Investment Officer Datuk Dr Nazri Khan Adam Khan said sentiment towards emerging market assets had started to improve as investors viewed the latest trade tariffs imposed by the US and China as likely to inflict less economic damage than many had feared.

“We are seeing more foreign funds coming back into Malaysia, and last week, it amounted close to RM200 million,” he told Bernama.

Furthermore, he said the country’s economic fundamentals were strong with gross domestic product projected to grow at five per cent this year, and on top of that, the local stock market was outperforming its peers in Thailand, Singapore and Indonesia.

On the technical front, Bank Islam Chief Economist Dr Mohd Afzanizam Abdul Rashid said the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) had surpassed its previous resistance level of 1,805 and the next resistance level is 1,839.

“Therefore, we should see FBM KLCI linger at around these points,” he said.

Next week, he said the market would scrutinise the message from the Federal Reserve (Fed) following its upcoming Federal Open Market Committee meeting on Sept 25-26.

Mohd Afzanizam said the US economy is on solid footing with average hourly earnings growing 2.9% year-on-year in August, surpassing its 2.2% average since 2010.

“As such, wages are rising at a rapid pace. So we could see the Fed become more hawkish in their accompanying statement. If that happens, that could rattle the markets,” he added.

On a Friday-to-Friday basis, the benchmark FBM KLCI settled 6.88 points better at 1,810.64.

The FBM Emas Index was up 42.96 points to 12,607.96 and the FBMT100 Index gained 36.35 points to 12,423.33.

The FBM 70 added 2.39 points to 14,846.96, the FBM Emas Shariah Index increased 69.14 points to 12,735.94, while the FBM Ace improved 27.2 points to 5,204.44.

On a sectoral basis, the Finance Index climbed 45.22 points to 17,968.66, the Plantation Index was up 0.33 of-a-point to 7,552.19, while the Industrial Index rose 26.41 points to 3,230.77.

Weekly turnover increased to 7.8 billion units worth RM9.5 billion from 7.29 billion units worth RM7.87 billion.

Main market volume declined to 5.27 billion shares valued at RM8.89 billion from 5.66 billion shares valued at RM8.99 billion recorded last Friday.

Warrants turnover shrank to 1.49 billion units worth RM383.58 million from 2.98 billion units worth RM872.93 million.

The ACE market volume decreased to 1.03 billion shares worth RM229.39 million from 1.73 billion shares worth RM238.88 million.

The market was closed last Monday in lieu of the Malaysia Day public holiday which fell on Sunday, Sept 16.

The gold futures contract on Bursa Malaysia Derivatives is expected to trade in a cautious mode next week amid the ongoing US-China trade conflict, said a dealer.

Phillip Futures Sdn Bhd Derivative Dealer Tee Guy Eon said notable events would be the release of the US Federal Open Market Committee meeting minutes and Malaysia’s Inflation Report next week that may set the market direction.

“In the week ahead, the local bullion will mainly track the sentiment of its US counterpart, the New York Commodity Exchange’s overnight gold futures market performance, which will also be affected by the developments in the US-Sino trade dispute,” he told Bernama.

On a Friday-to-Friday basis, September 2018, October 2018 and November 2018 each rose four ticks to RM161.40 a gramme respectively, while December 2018 improved one tick to RM161.45 a gramme.

Weekly turnover eased to four lots worth RM64,500 against five lots worth RM64,480, previously.

Open interest rose to 28 contracts from 25 contracts.

Bursa Malaysia and its derivatives were closed on Monday in lieu of the Malaysia Day public holiday which fell on Sunday, Sept 16. — Bernama

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