KUALA LUMPUR: Bursa Malaysia is likely to trend higher, supported by improving domestic economic figures and stabilising commodity prices.
Affin Hwang Investment Bank vice-president and Retail Research head, Datuk Dr Nazri Khan Adam Khan said the local bourse had fairly stabilised during the week just ended after the US Federal Reserve (Fed) kept interest rates unchanged.
The Fed had decided against a rate hike at its fourth Federal Open Market Committee meeting this week, after raising them for the first time in a decade in December 2015.
Nazri Khan said the FBM KLCI would likely find its next support and resistance level at between 1,600 and 1,620, and 1,630 to 1,650, respectively.
“We have improving economic data such as higher labour productivity and easing inflation, which means Bank Negara Malaysia has less pressure to increase interest rates,” he told Bernama.
In May, the Consumer Price Index eased to 2.0 per cent year-on-year, and was marginally down from 2.1 per cent recorded in April.
Meanwhile, Malaysia’s labour productivity grew by 3.3 per cent to RM74,538 per labour hour last year from RM73,091 in 2014.
However, investor sentiment was cautious ahead of the United Kingdom’s (UK) referendum on possible exit from the European Union on June 23.
“I think most likely the UK may remain inside the European Union.
Even if it decides to exit, it will take two years before it officially comes out.
The market will have enough time to adjust,” said Nazri Khan.
On Friday-to-Friday basis, the FBM KLCI fell 17.04 points to 1,624.18 from 1,641.22 recorded last week.
The FBM Emas Index declined 143.15 points to 11,357.42, the FBMT 100 Index shed 131.88 points to 11,060.17 and the FBM Emas Shariah Index was 129.41 points lower at 11,927.30.
On a sectoral basis, the Finance Index fell 155.17 points to 14,035.93, the Industrial Index decreased 28.34 points to 3,053.88 and the Plantation Index eased 8.92 points to 7,568.37.
Weekly turnover decreased to 7.17 billion units worth RM7.25 billion from 8.55 billion units worth RM8.25 billion last week.
Main market volume fell to 4.30 billion shares worth RM6.80 billion from 5.61 billion shares worth RM7.73 billion previously.
Warrant turnover improved to 1.12 billion units valed at RM150.13 million from 1.05 billion units valued at RM150.50 million last week.
The ACE market declined to 1.74 billion shares worth RM297.08 million from 1.88 billion shares worth RM364.59 million previously. — Bernama