KUALA LUMPUR: Bursa Malaysia is likely to move higher and retest the 1,650 level next week, as investors anticipate more positive announcement from Prime Minister Tun Dr Mahathir Mohamad’s working visit to China.
Rakuten Trade Sdn Bhd head of research Kenny Yee said market players were hoping that more projects would be tied up for the infrastructure and construction sectors as this would boost development growth in both sectors and create more job opportunities in the future.
“Although foreign funds remained net sellers earlier in the week, a reversal of the trend was seen in the past two days when we see net inflows.
“We think this could be the start of tapering of the sell-off in funds,” he told Bernama.
Yee said the local bourse also saw improvement in buying for small caps and construction stocks, even though the shares of these counters retreated due to profit-taking.
Besides that, he said talks that Bank Negara Malaysia would reduce the overnight policy rate (OPR) could be an opportunity for investors to buy, as share prices would be cheaper on pullbacks.
Meanwhile, Phillip Capital Management Malaysia senior vice-president (investment) Datuk Dr Mohd Nazri Khan Adam Khan said that FBM KLCI was expected to move lower towards the 1,620 to 1,630 level next week on the likelihood of more foreign fund outflows.
This is due to the slowdown in the domestic and global economy, which are pushing international investors to shift their asset allocation into safe havens such as bonds and money market.
“On another note, the surging US dollar value is making things more expensive, where we will see our commodities such as palm oil declining and the ringgit depreciating further.
“Not only Malaysia will be seeing a further outflow, but also the regional markets as well. For instance, China, Japan and Hong Kong this week saw the worst week of their stock market closing since October last year,” he told Bernama.
On a Friday-to-Friday basis, the ringgit fell to 4.1310/1340 against the US dollar from 4.1300/1350 previously.
During the week just-ended, Bursa Malaysia was traded mostly higher following optimism on the revival of the East Coast Rail Link and Bandar Malaysia mega project and in tracking the Wall Street performance.
Ekovest was the most-actively traded stock for the week. It ended flat at 94.5 sen on Friday with 111.24 million shares changing hands.
On a Friday-to-Friday basis, the benchmark FBM KLCI settled 16.31 points higher at 1,638.38. – Bernama
