KUALA LUMPUR: Bursa Malaysia is likely to extend gains towards the 1,550 point level next week, following a round of well-received debt auctions in Spain and Italy, an expected monetary easing in China and huge liquidity on the domestic front.
The fact that the FTSe All-World equity index was at a two-week high and Wall Street’s at a five-month high, with the FBM KLCI close to a breakout five months high at above 1,530, reflected a renewed risk-on environment for the global equities after five months of turbulence and negativity, Affin Investment Bank head of retail research, Dr Nazri Khan told Bernama.
He said the market might shift focus back toward the fourth quarter corporate earnings and economic data next week.
He also said given that there was a lot of liquidity sitting on the sidelines, any stronger than expected recovery in the economic data, might bring a huge inflow of liquidity which in turn could become the tsunami the market has been waiting for.
The plantation sector, which gained an impressive 4.8 per cent over the last two weeks, was expected to lead the local market rally.
“There is a strong resurgence of interest in plantation stocks such as KLK, Kulim, Genting Plantation, Sarawak Oil Palms, Rimbunan Sawit and Gleanely Plantation,” nazri said.
If the pick-up in liquidity and the stirrings by selected bluechips and frontliners is maintained, especially if the plantation and construction sectors are any indication, the local market may actually be inching towards an early 2012 recovery.
However, he said, the direction of oil can still be a wildcard on the current positive sentiment. Investors should keep a close eye on the price of crude oil as there are tensions between the west and Iran over the latter’s nuclear ambitions which threatens to destabilise oil supplies.
For the week just-ended, the key FBM KLCI rose 14.1 points to 1,523.07 from 1,514.13 previously, bolstered by regional funds, taking advantage of the domestic market’s defensiveness.
On a week-to-week basis, the Finance Index edged up 63.9 points to 13,451.67, the Plantation Index gained 69.0 points to 8,505.98 and the Industrial Index added 41.1 points to 2,798.02.
The FBM emas went up 95.5 points to 10,512.40, the FBM TOP100 rose 94.1 points to 10,319, the FBM Ace Index edged up 170.5 points to 4,300.47 and the FBM70 Index advanced 255.4 points to 11,838.52.
Total weekly volume increased to 8.6 billion shares worth RM8.5 billion from the 6.399 billion shares worth RM5.785 billion last week. Main Market turnover appreciated to 5.1 billion shares, valued at RM8.0 billion from the 4.162 billion shares worth RM5.363 billion previously.
Warrants increased to 2.087 billion units worth RM401.287 million from 1.418 million units worth RM298.669 million.
Volume on the ACe market rose to 1.417 billion shares valued at RM210.224 million from the 799.692 million shares valued at RM109.488 million last week. — Bernama