Bursa Malaysia expected to trend upward

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KUALA LUMPUR: Bursa Malaysia is expected to trend upward with the benchmark index trading within the 1,650 to 1,680 band, following the US Federal Reserve’s historic interest rate hike, which signals an improvement in the world’s largest economy.

After a two-day meeting that began on December 15, the Federal Open Market Committee finally increased its interest rates after a lengthy discussion.

It raised the range of its benchmark lending rate by a quarter of a percentage point to between 0.25 and 0.5 per cent.

The Fed’s 25-basis-point increase was the first in nine years since the 2007-2009 financial crisis.

Affin Hwang Investment Bank vice-president/head of Retail Research Datuk Dr Nazri Khan Adam Khan said this shows that the global economy is finally regaining its confidence, which will support emerging countries.

According to him, although Asian stock markets including Bursa Malaysia retreated after the interest rate hike, it is only for a short term and local equities will likely rebound.

“Normally, towards the end of the year and early January, equities markets will likely trade higher due to window-dressing activities,” he said, adding that the outflow of foreign funds has started to decrease, as international investors are starting to regain confidence in the local shares.

“A result can be seen from the global rating agency Fitch Ratings, which maintained Malaysia’s rating at A- with stable outlook,” he added.

On a weekly basis, the key benchmark FTSE Bursa Malaysia (FBM KLCI) finished at 1,643.90, up 3.76 points from last week’s 1,640.14.

The FBM Emas Index rose 44.72 points to 11,484.42, the FBMT100 Index increased 42.73 points to 11,158.24, the FBM Emas Shariah appreciated 84.64 points to 12,391.05, the FBM 70 gained 112.13 points to 12,839.07 but the FBM Ace fell 93.67 points to 6,333.87.

Sector-wise, the Finance Index added 22.67 points to 14,039.46, the Plantation Index improved 61.34 points to 7,413.99 and the Industrial Index was 12.34  points better at 3,194.79.

Weekly turnover decreased to 8.38 billion units valued at RM9.70 billion from 8.90 billion units valued at RM9.07 billion recorded last week.

Main market volume eased to 5.29 billion units worth RM8.78 billion versus 5.59 billion units worth RM8.36 billion.

Warrant turnover advanced to 1.28 billion units worth RM449.19 million against 747.26 million units worth RM118.49 million.

The ACE market went down to 1.8 billion units worth RM429.52 million from 2.55 billion units valued at RM589.97 million. — Bernama