Stronger Ringgit, commodity prices to shore up Bursa Malaysia next week

: Bursa is expected to strengthen next week, driven by stronger ringgit and commodity prices, as well as rising reserves and higher national fourth quarter economic growth.

Phillip Capital Management senior vice-president (investment) Datuk Dr Nazri Khan Adam Khan said more upside is expected on the local amid uncertainty over the outcome of the US- trade negotiations.

“Despite global geopolitical concerns, the local market continues its near two-month upside movement above the 1,700-pt critical support mark,” he told Bernama.

He said another factor that would contribute to the market movement next week would be the release of economic data from , China, Japan and Taiwan.

Nazri Khan said the market would also be influenced by the outcome of the US-China trade talks.

“The talks between Vice-Premier Liu He and US trade representative Robert Lighthizer were the reason behind risk-averse attitude among investors,” he said.

Meanwhile, he said the gross domestic product (GDP) growth would also be one of the important catalysts as it improved above expectations, buoyed by a rebound in mining and quarrying, coupled with higher growth from the services and manufacturing sectors, albeit at a slower pace.

“Malaysia’s GDP grew 4.7% in the last quarter of 2018 compared with 4.4% in the previous quarter, slightly above our in-house and market expectations of 4.5 per cent and 4.6 per cent, respectively,” he said.

On the technical side, he said a further rise above 1,700 points in the FBM KLCI would indicate a bullish market sentiment.

“Having said that, we expect FBM KLCI to find its footing and enter into a short-term bullish movement,” he said.

For the week just ended, the local stock market was benign with investors mostly adopting a wait-and-see approach amid cautious sentiment over the US-China trade talks that began on Thursday.

On a Friday-to-Friday basis, the benchmark FBM KLCI settled 2.31 points higher at 1,688.83.

The FBM Emas Index was 24.75 points higher at 11,750.27, the FBMT 100 Index increased 11.36 points to 11,612.9 and the FBM Emas Shariah Index jumped 70.57 points to 11,663.6.

The FBM 70 eased 4.71 points to 14,028.19 while the FBM Ace Index rose 91.37 points to 4,646.59.

Sector-wise, the Financial Services Index erased 9.55 points to 17,632.56 while the Plantation Index increased 35.83 points to 7,335.43 and the Industrial Products and Services Index inched up 1.16 points to 163.13.

Weekly turnover rose to 14.85 billion units worth RM9.78 billion against 4.94 billion units worth RM3.8 billion.

Main Market volume expanded to 11.05 billion shares valued at RM8.99 billion versus 3.77 billion shares valued at RM3.57 billion.

Warrants turnover increased to 2.27 billion units worth RM480.02 million from 690.66 million units worth RM149.03 million.

The ACE Market volume improved to 1.52 billion shares valued at RM305.71 million against 483.1 million shares valued at RM83.25 million.

The futures contract on Bursa Malaysia Derivatives is expected to trade higher next week following the release of weak US economic data, thus reducing chances for the Federal Reserve to hike rates this year.

A dealer said the weak US retail sales, which fell 1.2% in December 2018 compared with November 2018, would encourage the Federal Reserve to hold interest rates steady for a while.

“This prospect is seen as beneficial for gold prices, given that higher interest rates will lift the opportunity cost of holding non-interest bearing assets,” he added.

On a Friday-to-Friday basis, spot month February 2019, March 2019, April 2019 and June 2019 were four ticks higher at RM172.20, RM172.20, RM172.50 and RM172.60 a gramme, respectively.

Weekly turnover amounted to four lots worth RM68,820 compared with nil last week, while open interest was at 22 contracts from 23 contracts previously. — Bernama

Source: The Sun Daily

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