FBM KLCI likely to trend higher next week

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KUALA LUMPUR: The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) is likely to trend higher next week on the heels of the recent rally following the US Federal Reserve’s decision to keep its US$85 billion-a-month bond-buying programme intact, an analyst said.

Affin Investment Bank vice president/head of Retail Research Dr Nazri Khan said after the strong rebound by the benchmark index  – 29 points gained in two days and 160 points in a month – it should follow through and trend higher, tracking upswings on Wall Street and Asian regional indices.

“Hence, the Fed factor and strong follow-through buying amidst runaway bullish undertones, should inflate gains for Bursa/FBM KLCI with the next target being 1,826.22, an all-time-high achieved on May 6,” he told Bernama.

He said the immediate resistance for the index stays at the July 26 high of 1,811.65 with next major support pegged at the September 13 low of 1,764.13.

“Alternatively, prospects for lower global bond yields, a more ultra-loose monetary policy and rising commodity prices should continue to support local equity markets.

“Investors should therefore take the current market bullishness as an opportunity to accumulate fundamentally strong stocks for another round of an upside wave,” he added.

During the week just ended, the FBM KLCI closed within two per cent of its all-time best levels.

On a Friday-to-Friday basis, the FBM KLCI improved 31.03 points to 1,801.83, the Finance Index surged 442.87 points to 17,030.27, the Plantation Index increased 3.15 points to 8,333.9 and the Industrial Index improved 43.52 points to 3,049.27.

The FBM Emas Index jumped 219.83 points to 12,494.42, the FBMT100 Index was  205.48 points higher at 12,233.68, the FBM 70 Index advanced 215.56 points to 14,123.28 and the FBM ACE Index rose 265.56 points to 5,359.95.

Weekly turnover fell to 7.28 billion shares worth RM8.42 billion from the 7.77 billion shares worth RM9.36 billion last week.

Main market volume declined to 5.75 billion shares worth RM8.1 billion compared to the previous week’s 6.26 billion shares worth RM9.06 billion.

Warrants declined to 183.4 million units valued at RM23.31 million from 283.38 million units valued at RM42.446 million.

The ACE market volume, meanwhile, rose to 1.44 billion shares worth RM219.64 million from 1.21 billion units worth RM260 million last Friday. — Bernama

FBM KLCI

THE FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) futures contracts on Bursa Malaysia Derivatives is expected to trend higher next week in line with the bullish cash market, dealers said.

Affin Investment Bank vice president/head of Retail Research Dr Nazri Khan said the local market is expected to receive a boost from the US Federal Reserves decision to leave its current economic stimulus programme intact.

“We expect these fresh rounds of foreign dollar injection to push carry trade into higher yields for the Malaysian market, boosting local asset liquidity, specifically Bursa stock market and Malaysian government bonds,” he told Bernama.

On a Friday-to-Friday basis, September 2013 rose 27 points to 1,792, October 2013 improved 30 points to 1,795, December 2013 perked 33 points to 1,793 and March 2014 advanced 42 points to 1,792.

Turnover declined to 32,564 lots from 44,711 lots last week, while open interest widened to 56,582 contracts from 50,266 contracts previously.

Meanwhile, the benchmark FBM KLCI rose 31.03 points to 1,801.83 compared to 1,770.8 last Friday. — Bernama

KLIBOR

THE three-month Kuala Lumpur Interbank Offered Rate (Klibor) futures contracts on Bursa Malaysia Derivatives is expected to be quiet next week on a lack of fresh leads, dealers said.

During the week just ended, the Klibor futures were mostly untraded, except on Tuesday, due to the lack of buying interest. Turnover decreased to 725 lots from 1,900 lots last week.

On a week-to-week basis, spot month September 2013 increased one point to 96.80, while October 2013 and November 2013 each remained pegged at 96.78.

The underlying three-month KLIBOR stood at 3.20 per cent. — Bernama