KUALA LUMPUR: Bursa Malaysia is expected to remain firm and trend higher and gradually retest the 1,896.23 level as traders increased their bets on solid USA economy, Federal Reserve’s dovish testimony, reduced geopolitical tension, and a steady recovery of the world economy.
Affin Investment Bank vice-president and head of Retail Research Dr Nazri Khan Adam Khan said local stocks should get momentum from world stocks performance which recently hit a five-year and all-time-high with an impressive gain driven by a round of positive economic data and low interest rate.
“We expect many Asian bourses including Bursa Malaysia to play catch-up,” he told Bernama.
He said fresh rounds of foreign funds injection would also slowly push trades into high-yield Malaysian market, boosting local asset liquidity specifically Bursa stock market and Malaysian government bonds.
Nazri said the recent upward momentum in equity is expected to continue, given the steady follow-through Bursa Malaysia performance during the last week session.
“Overall, the early Bursa Malaysia edge goes to the bulls with the next target at the 1,880 level, benefitting from a risk-on vibe across US and Europe.
“We reiterate that the FBMKLCI remains above its monthly uptrend line, thus is in a secular bull market.
“This means any significant periods of weakness this year should be viewed as strong buying opportunities,” he said.
While local small caps consolidate with buoying sentiment, impressive rotational interest on large and mid-cap blue chips should showcase healthy risk taking with active foreign participation accumulating battered down blue chip stocks.
“Strategy wise, given that the short-term trend has turned positive towards 1,880, traders should accumulate our last recommended Top Featured Stocks which include the likes of Gamuda, Bursa, IHH, IGB, Sunway, Westports, Econpile, Pintaras, Sentoria, Huayang, KSL, and Matrix,” he added.
For the week-just-ended, the FBM KLCI rose 6.6 points to 1,870.99 on Friday from 1,864.31 points last Friday.
The Finance Index soared 154.6 points to 12,648.01, Industrial Index inched 2.8 point to 3,260.27 and the Plantation Index dropped 279 points to 8,590.29.
The FBM Emas Index was 23.9 points higher at 13,082.26, FBMT100 Index firmed 34.3 to 12,648.01. — Bernama