KUALA LUMPUR: Bursa Malaysia is expected to trade higher amid the US Federal Reserve’s (Fed) decision not to increase interest rates.
Affin Hwang Investment Bank vice-president/head of Retail Research, Datuk Dr Nazri Khan Adam Khan said the Fed’s decision to delay its rate hike for the next two months would give less pressure on Bank Negara Malaysia to revise its monetary policy.
“But certainly, the Fed’s Open Market Committee would revise its decision later this year, as there are two more policy meetings on October 27 to 28 and December 15 to 16,” he said, adding that in the meantime, the local stock market was expected to perform positively.
The US dollar, conversely, had weakened across the board, said Nazri Khan.
“With the ringgit strengthening and trading at around 4.20 against the greenback now, we are anticipating some profit taking to take place on the equity market,” he told Bernama.
He also said other factors that will drive the market was the announcement by the Prime Minister Datuk Seri Najib Tun Razak on market stimuli, particularly the RM20 billion injection for ValueCap Sdn Bhd to invest.
Such a move would galvanise investor sentiment and the market volatility could be moderated with buying support from ValueCap and other government-linked investment companies going forward, he said.
“We are also anticipating more announcement from the Special Economic Committee on issues of economics, rising cost of living, and the impact of the Goods and Services Tax,” he added.
Meanwhile, the market ended mostly higher in the holiday-shortened week as the the local bourse was closed on Wednesday for Malaysia Day.
The week also saw a rally due to the surge in Brent crude, which rose 6.7 per cent to US$49.85 per barrel, its biggest increase in more than two weeks.
On a weekly basis, the key benchmark FBM KLCI finished 65.85 points better at 1,669.45 on bargain hunting and profit taking.
The FBM Emas Index perked 448.60 points to 11,477.27, FBMT100 Index gained 446.09 points to 11,198.86 and the FBM Emas Shariah rose 497.93 points to 12,049.27.
The FBM Ace eased 8.37 points to 5,469.95 and the FBM 70 soared 509.92 points to 12,400.48.
Sector-wise, the Finance Index leapt 540.82 points for 14,556.72, Plantation Index climbed 218.55 points to 7,108.62 and Industrial Index fell 39.18 points to 3,124.04.
Weekly turnover decreased to 8.76 billion units worth RM10.39 billion from last week’s 10.31 billion units worth RM9.54 billion.
Main market volume eased to 5.25 billion units worth RM9.60 billion from 5.57 billion units worth RM8.37 billion last week.
Warrant turnover fell to 2.20 billion units valued at RM456.35 million from 2.63 billion shares valued at RM637.15 million previously.
ACE market volume declined to 1.30 billion units worth RM330.77 million from last week’s 2.10 billion units worth RM531.89 million. — Bernama