Saturday, September 19

Bursa likely to trade firmer next week, FBM KLCI to repeat rally


KUALA LUMPUR: Shares on Bursa Malaysia are expected to be firmer next week, with the key index FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) repeating its recent rally and extending the momentum higher towards the 1,850 resistance level.

Affin Investment Bank Bhd vice-president and head of Retail Research Dr Nazri Khan said the near-term trend remains firmly bullish, with resistance coming in at the 1,850 and 1,860 levels.

“Despite the weaker global equity market, the FBM KLCI is holding up well due to Bursa’s defensive appeal, resilient domestic liquidity and its lower vulnerability to foreign investor withdrawals,” he told Bernama.

The analyst also said the delivery of a fiscally-disciplined Budget 2014 should improve Malaysia’s fundamentals and address the sustainability of growth as well as reduce the risk of a rating downgrade as we move into the New Year.

On the external front, Nazri said there would be a cautious tone as the market possibly believed the US Federal Reserve would take tapering action as early as next week.

“We believe Bursa will benefit from the regional dips and resume its upside momentum despite being overbought over the last four straight weeks,” he added.

On a Friday-to-Friday basis, the market recorded intra-day highs on Monday (1,843.62) and Tuesday (1,846.92) before ending the week 13.4 points higher at 1,840.35.

The Finance Index soared 74.48 points to 16,833.31, the Industrial Index added 2.21 points to 3,099.58, and the Plantation Index rose 26.96 points to 9,025.56.

The FBM Emas Index chalked up 70.29 points to 12,697.22, the FBMT100 Index advanced 65.16 points to 12,427.29, the FBM Ace bolstered 75.39 points to 5,628.69, but the FBM 70 erased 31.09 points to 14,067.62.

Weekly total turnover slipped to 5.96 billion shares worth RM8.87 billion from 5.97 billion shares worth RM8.47 billion last week.

Main market volume rose to 4.46 billion units valued at RM8.48 billion from last week’s 4.26 billion units valued at RM8.09 billion.

Warrant turnover expanded to 213.09 million shares worth RM28.08 million, from 161.164 million shares worth RM19.84 million last Friday.

The ACE market volume slipped to 1.2 billion shares worth RM313.61 million, from 1.43 billion shares worth RM336.37 million previously. — Bernama


A stronger underlying cash market is expected to positively influence the FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) futures contracts on Bursa Malaysia Derivatives next week.

Affin Investment Bank vice-president and head of Retail Research, Dr Nazri Khan, said the FBM KLCI will experience high buying momentum next week after factoring in Bursa’s safe-haven status and defensive appeal amidst tapering volatility.

There will also be more rotation play towards small cap stocks and portfolio rebalancing with institutional funds positioning ahead of the year-end towards Budget 2014 beneficiaries, he said.

“We believe the FBM KLCI is completing a bullish head and is now preparing a support platform to jump higher after making a bullish breakaway gap at 1,825 to 1,818 and hitting an all-time-intraday high of 1,840.12 early last week,” he told Bernama. — Bernama


THE three-month Kuala Lumpur Interbank Offered Rate (Klibor) futures contracts on Bursa Malaysia Derivatives are expected to be quiet next week with trading lacking direction. Dealers said the market has been quiet for the past few weeks with nobody pushing the market.

“The sentiment can remain the same,” a dealer said.

For the week just ended, the Klibor futures remained flat with no contract month traded and zero turnover, with open interest at 5,745 contracts.

On a week-to-week basis, spot month December 2013 dipped to 96.77 from 96.78, both January 2014 and February 2014 declined to 96.75 from 96.76, while March 2014 remained at 96.72. The underlying three-month Klibor increased to 3.23 per cent from 3.21 per cent last week. — Bernama