KUALA LUMPUR: Share prices on Bursa Malaysia are expected to trend higher next week on positive external developments as well as firm commodity prices despite the weaker ringgit and thin Ramadan seasonal volume.
Affin Investment Bank vice-president/head of Retail Research Dr Nazri Khan said the FTSE Bursa Malaysia KLCI (FBM KLCI) will trend higher riding on Japan’s post-general-election easy money, China’s new stimulus package and higher commodity prices.
“Global equities are likely to move higher following a convincing win for Prime Minister Shinzo Abe’s Liberal Democratic Party in Japan, a result that could usher in a period of stability in Japan and push more ‘Abenomics’.
“The stable outlook for the Chinese economy, plus the positive batch of corporate earnings and economic data releases in the US and Europe, will push global equities and industrial commodities higher next week,” he told Bernama.
On the local front, Nazri said the sole current concern is the ringgit’s mixed performance which may affect the local stock rally if the local unit’s weakness is sustained.
He believed that the weakness is temporary and the ringgit will return to strength upon clarity on the US Federal Reserve’s tapering of its qualitative easing programme and China’s economic stabilisation measures to be announced soon.
For the week just ended, the FBM KLCI marked a new all-time closing high of 1,805.31 on Tuesday and continued the momentum threafter, setting another new high on Wednesday at 1,810.00 lifted by foreign fund inflows.
The key index, however, retreated from Thursday onwards with investor sentiment dragged down by caution over the region’s second-quarter corporate earnings season as well as some unfavourable overseas news.
On a Friday-to-Friday basis, the FBM KLCI ended 9.87 points higher at 1,807.61 against last Friday’s 1,797.74 points.
The Finance Index soared 76.48 points to 17,337.23, the Industrial Index rose 33.31 points to 3,079.27 but the Plantation Index declined 12.59 points to 8,405.34.
The FBM Emas Index advanced 56.83 points to 12,600.05, the FBMT100 Index chalked up 64.5 points to 12,339.28, the FBM Mid 70 Index expanded 64.16 points to 14,519.78 and the FBM Ace Index surged 91.22 points to 5,085.08.
Weekly turnover fell to 6.832 billion shares worth RM9.501 billion from 7.518 billion shares valued at RM11.102 billion registered last week.
Main market volume decreased to 5.436 billion units worth RM9.173 billion from 6.385 billion units worth RM10.823 billion recorded previously. — Bernama
FBM KLCI
The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) futures contracts on Bursa Malaysia Derivatives are likely to trade firmer next week, tracking the movement in the underlying cash market, dealers said.
Dealers said although the market will be traded in a cautious mode due to the corporate earnings season, it will remain higher on foreign inflows support.
The US Federal Reserve’s policy meeting, to be held next week, will likely influence regional equity markets, a dealer said.
On a Friday-to-Friday basis, the underlying FBM KLCI ended 9.87 points higher at 1,807.61 compared with last Friday’s 1,797.74.
Spot month July 2013 and September 2013 rose 10 points each to 1,808.5 and 1,807 respectively, August 2013 improved 9.5 points to 1,808.5 while December 2013 gained 5.5 points to 1,808.5.
Turnover increased to 55,342 lots from 20,079 lots last week while open interest widened to 70,196 contracts from 41,107 contracts previously. — Bernama
KLIBOR
The three-month Kuala Lumpur Interbank Offered Rate (Klibor) futures contracts on Bursa Malaysia Derivatives are expected to remain flat next week, dealers said. For the week just ended, the Klibor futures market only saw one trading day with two contract months traded.
This week the turnover stood at 70 lots, while last week the futures contracts were untraded.
Meanwhile, open interest decreased to 5,895 contracts from 5,925 contracts last week.
August 2013, September 2013, October 2013 and December 2013 remained at 96.82, 96.80, 96.79 and 96.78 respectively. The underlying three-month Klibor was unchanged at 3.20 per cent. — Bernama