KUALA LUMPUR: Bursa Malaysia is expected to stay in consolidation mode with a slight positive bias next week, and the benchmark index is seen as hovering in the 1,475-1,495 range.
Rakuten Trade equity research vice-president Thong Pak Leng said economists are predicting that Bank Negara Malaysia will maintain the Overnight Policy Rate at three per cent at least until end-2025.
"We believe this will instil confidence in the improving economy, providing greater stability in corporate earnings and, in turn, enhancing the fundamentals of the local market.
"We reckon that interest in Malaysian equities will remain strong given the robust daily trading volumes. However, investors are staying cautious due to the rising volatility in the global market," he told Bernama.
He also noted that the FTSE Bursa Malaysia KLCI experienced a pullback amid heavy selling after exceeding the 1,500 resistance level on Monday.
Nevertheless, he said, the index has held firm above the 20-day exponential moving average, indicating a growing chance of an upward trajectory.
Meanwhile, SPI Asset Management managing director Stephen Innes said that hopes for rapid interest-rate cuts have recently been dented due to robust economic data and pushback from policymakers at the Federal Reserve and European Central Bank.
However, a recession-free outlook for 2024 in the United States (US) remains a huge positive for Bursa Malaysia, especially for manufacturing exporters and the oil and gas sector, he said.
"Furthermore, the US futures market predicts a total of 145 basis points of easing through December.
"These factors may create a favourable situation for the local landscape if investors can stay patient. Overall, I think we are near a short-term base and a more favourable trend is expected to emerge next week," he added.
Bursa Malaysia started this week on a firm note by breaching the 1,500 psychological level last seen in August 2022 by ending the day at 1,501.11.
However, the local bourse succumbed to profit takings over the next three days on a lack of follow-through buying support. It managed to claw back some gains on Friday.
The week also saw Bursa Malaysia in volatile trading, with several counters hitting limit up and limit down.
On a Friday-to-Friday basis, the barometer index inched down 0.97 of-a-point to end the week at 1,486.37 versus 1,487.34 previously.
On the index board, the FBM Emas Shariah Index shed 78.31 points to 11,170.67, the FBM 70 Index fell 122.42 points to 15,041.39, the FBM Emas Index gained 53.82 points to 11,065.16, the FBMT 100 Index trimmed 27.59 points to 10,734.29, and the FBM ACE Index dropped 591.28 points to 4,790.15.
Sector-wise, the Energy Index slipped 22.39 points to 843.32 and the Industrial Products and Services Index eased 1.93 points to 173.92, while the Plantation Index rose 61.16 points to 7,163.09 and the Financial Services Index added 63.48 points to 16,613.52.
Weekly turnover improved to 25.91 billion units worth RM14.69 billion versus 27.09 billion units worth RM16.66 billion in the preceding week.
The Main Market volume narrowed to 16.10 billion shares worth RM12.79 billion from 18.34 billion shares worth RM14.83 billion in the previous week.
Warrants turnover slipped to 3.27 billion units valued at RM425.21 million from 3.85 billion units valued at RM474.42 million last week.
The ACE Market volume advanced to 5.93 billion shares worth RM1.48 billion compared with 4.86 billion shares worth RM1.35 billion previously.
– BERNAMA
