KUALA LUMPUR: Share prices on Bursa Malaysia is expected to extend its downward trend brought about by weak investor sentiment on the back of impending interest hike by the US Federal Reserve, the volatility of the Chinese yuan, softer ringgit, weaker commodity prices and increasing geopolitical tension in North Korea.
Affin Hwang Investment Bank vice-president and head of Retail Research Datuk Dr Nazri Khan Adam Khan said following the bearish performance of the global stocks, the FTSE Bursa Malaysia KLCI (FBM KLCI) could test the next support level of 1,560 points and 1 550 points.
“Asian stocks and currencies continue to slide and under extensive pressure following disappointing manufacturing data from China which has added to fears about global economic growth, he said.
China’s Purchasing Managers’ Index showed that Chinese manufacturing activity shrank for a sixth straight month in August, falling to 47.1 from July’s final reading of 47.8 and remained below the threshold of 50 that separated expansion from contraction.
“The market is now under a defensive environment with investors dumping risk assets from their portfolios to grab more dividend stocks, core government bonds, the yen and gold.
“Overall, it is believed that the recent sell down on the local as well as regional bourses might not be over and the downside could continue,” he told Bernama.
However, this could be a good opportunity for investors to start accumulating quality counters.
“Most KLCI-linked counters look attractive now.
“Investors may want to accumulate and lock in their positions now for attractive counters like SKPetro, Tenaga Nasional, Telekom Malaysia, Public Bank, IOICorp and Axiata,” he added.
On a weekly basis, the benchmark FTSE Bursa Malaysia KLCI finished 22.15 points easier at 1,574.67 in volatile trading.
The FBM Emas Index declined 170.95 points to 10,794.97, the FBMT100 Index decreased 163.66 points to 10,529.77, the FBM 70 eased 237.08 points to 11,536.19 and the FBM Ace depreciated 243.65 points to 5,210.73.
Sector-wise, the Finance Index declined 150.5 points to 14,132.32, the Plantation Index contracted 124.6 points to 6,869.39 and the Industrial Index dropped 51.19 points to 3,026.49.
Weekly turnover fell to 9.79 billion units, worth RM9.74 billion, from last week’s 10.26 billion units worth RM10.76 billion.
Main market volume reduced to 5.04 billion units, valued at RM8.61 billion, from 5.80 billion units, valued at RM9.75 billion, recorded last week.
Warrant turnover increased to 3.31 billion units, worth RM862.57 million, against 2.70 billion units, worth RM644.19 million, recorded previously.
ACE market volume declined to 1.36 billion units, valued at RM263.49 million, from last week’s 1.76 billion units worth RM368.66 million. — Bernama
FBM KLCI
The FTSE Bursa Malaysia KLCI (FBM KLCI) futures contract (FKLI) on Bursa Malaysia Derivatives is expected to trend lower.
Affin Hwang Investment Bank vice-president and Hhead of Retail Research Datuk Dr Nazri Khan Adam Khan told Bernama that the FBMKLCI failed to build on its uptrend momentum as it has gone below the 1,600 psychological level.
“The market remained in the selling zone and with no convincing signs of reversal play in the near-term despite being deeply oversold,” he said.
Nazri Khan said a weak catalyst and negative market sentiment driven by China’s slowing economy, Federal Reserve impending Interest hike and other local issues were not supporting the market. — Bernama
KLIBOR
The three-month Kuala Lumpur Interbank Offered Rate (Klibor) futures contracts on Bursa Malaysia Derivatives are likely to hover around current levels.
There was only one transaction, with a volume of 100 lots, for the week just ended.
September 2015 fell one tick to 96.29, while October, November and December 2015 were traded unchanged throughout the week and remained pegged on Friday at 96.29, 96.29 and 96.29, respectively.
Open interest stood at 964 contracts. — Bernama