Cautious sentiment to weigh on Bursa Malaysia next week

: The downtrend momentum on Bursa will likely continue next week with investors staying cautious as worries over global trade dispute return, a dealer said.

He said as the corporate earnings season has come to an end, external developments, especially on trade, would have a major influence in the trading pattern.

“Fears on global trade outlook will continue to haunt . If risk appetite shy away, the stock markets, not only Malaysia but also at the global stage, will be under pressure again,” he told Bernama.

It was reported that US President Donald Trump wants to press ahead with his plan to slap tariffs on US$200 billion worth of imports as soon as a public comment period concludes next week.

The dealer noted that the sensitivity around trade would cause an imbalance in the foreign exchange () market, thus elevating and other safe-haven currencies.

Argentina peso already took the hit, nearly losing a fifth of its value on forex markets on Friday before its announced a drastic decision to hike interest rate by 60% in order to shore up the currency.

For the week just ended, Bursa Malaysia traded higher at between 1,804.89 and 1,826.9, tracking the bullish ’s performance before snapping its four-day winning streak on Thursday due to US- trade jitters.

In the first two days, the local market moved positively and closed at a three-month high but retreated on Wednesday as market players reacted to Trump’s aggressive comments on trade and tariffs.

Bank Islam chief economist Dr Mohd Afzanizam Abdul Rashid said foreign funds were net sellers on Thursday at RM122.6 million after experiencing net inflows earlier of the week.

He said foreign funds were still fragile at this juncture, but generally, the trend had improved since May.

“Thus far, earnings from plantation and telco companies were less inspiring and could drag the (composite index) FBM KLCI.

“However, export-oriented industries such as rubber gloves, banks and consumers could provide strong support to the key index,” he said, adding that the support and resistance level is now located at 1,805 and 1,839, respectively.

The local market was closed on Friday for the National Day holiday.

Comparing to last Friday, the benchmark FTSE Bursa Malaysia KLCI settled 11.07 points firmer at 1,819.66 on Thursday.

The FBM Emas Index fell 22.07 points to 12,719.42 and the FBMT100 Index slipped 2.38 points to 12,526.43.

The FBM 70 gave up 299.32 points for 15,126.05 and the FBM Emas Syariah Index decreased 74.72 points to 12,807.07, while the FBM Ace dipped 151.39 points to 5,283.71.

On a sectoral basis, the Finance Index surged 280.24 points to 17,964.97, but the Plantation Index fell 67.77 points to 7,577.58, while the Industrial Index eased 17.3 points to 3,221.96.

Weekly turnover increased to 10.65 billion units worth RM9.9 billion from 9.65 billion units valued at RM9.15 billion previously.

Main market volume rose to 6.81 billion shares worth RM9.05 billion compared with 6.64 billion shares valued at RM8.32 billion.

Warrants turnover improved to 1.8 billion units worth RM488.26 million from 1.69 billion units valued at RM444.85 million.

The ACE market volume widened sharply to 2.03 billion shares valued at RM360.64 million versus 1.31 billion shares valued at RM379.24 million.

The futures contract on Bursa Malaysia Derivatives is expected to trend lower next week on weaker demand.

Phillip Futures Sdn Bhd Derivative Dealer Chang Hui Ying said Bursa Malaysia gold is also expected to trade in a range bound, tracking the performance of the US Commodity Exchange (COMEX) gold prices.

“Investors are keenly watching the psychological U$1,200 level of COMEX gold’s support. If it is broken we expect a downtrend in Bursa Malaysia gold as well,” he told Bernama.

Chang said traders would also continue to look for clues from US economic data on the direction of the US interest rates.

The strengthening of the greenback on expectations of the US interest rate increases would pressure gold prices downward, he added

On a Thursday-to-Friday basis, August 2018 rose 32 ticks to RM158.9 a gramme, while September 2018, October 2018 and November 2018 added 35 ticks each to RM159.30, RM159.65 and RM160 a gramme, respectively.

Weekly turnover for the holiday-shortened week rose to 11 lots worth RM173,985 from six lots worth RM94,430 in the previous week.

Open interest declined to 37 contracts from 43 contracts.

Bursa Malaysia and its derivatives was closed on Friday for the Merdeka Day holiday. — Bernama

Source: The Sun Daily

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