KUALA LUMPUR: The FTSE Bursa Malaysia KLCI (FBM KLCI) is likely to trend lower and in cautious mode, with the benchmark index moving between 1,740 and 1,750, as concerns over a US possible interest rate increase in December continues to dominate sentiment in the equities market.
Affin Hwang Investment Bank vice-president and head of Retail Research, Datuk Dr Nazri Khan Adam Khan said there is a good chance that the Federal Reserve would increase interest rates in December and this is negative for emerging markets, including Malaysia.
“After breaking its 1,760 support level, the FBM KLCI is expected to test the1,740 level, a 200-day moving average,” he added.
The local market is also seeing a foreign funds outflow over the past few days with interest shifting to neighbouring countries, impacted by the World Bank’s latest report on the Malaysian economy.
“The World Bank singled out Malaysia as one of only two Asian economies where household debt exceeds 70 per cent of Gross Domestic Product.
“However, the local market is expected to see rotational play from bluechip stocks to the ACE market and penny stocks.
This is evident in the rise on the ACE Market to a two-year high and technology stocks which increased to a 13-year high.
“The increase in retail participation in these stocks on the local market is expected to cushion foreign outflow,” Nazri Khan told Bernama.
On a weekly basis, the benchmark FTSE Bursa Malaysia KLCI slipped 8.68 points to 1,755.32 from 1,764 last Friday.
The FBM Emas Index declined 17.95 points to 12,579.69 and the FBMT 100 Index slid 24.23 points to 12,225.22.
The FBM Emas Shariah Index improved 23.17 points to 12,877.84, the FBM 70 rose 104.84 points to 15,242.84 and the FBM Ace jumped 256.96 points to 6,922.74.
On a sectoral basis, the Finance Index dropped 54.91 points to 16,520.62, the Industrial Index edged up 0.54 of a point to 3,215.62 and the Plantation Index added 45.53 points to 7,966.76.
Total turnover expanded to 16.33 billion units valued at RM10.05 billion from 12.29 billion units valued at RM9.66 billion last week.
Main Market volume rose to 9.80 billion shares valued at RM9.06 billion from 7.86 billion shares valued at RM8.50 billion.
Warrants volume declined to 663.12 million units worth RM74.29 million from last Friday’s 734.60 million units worth RM84.73 million.
The ACE Market increased to 5.83 billion units valued at RM912.72 million from 3.66 billion units valued at RM681.19 million. — Bernama