KUALA LUMPUR: Bursa Malaysia is expected to trade firmer next week, taking cue from the encouraging 2017 gross domestic product (GDP) data released on Wednesday.
Affin Hwang Investment Bank Vice-President/Head of Retail Research, Datuk Dr Nazri Khan Adam Khan said the 5.9% GDP growth, deemed as positive and taking on the good momentum from last year, would improve investors’ appetite on the local bourse.
“We can see that the volume has gone up too, which means we have the momentum to trend higher next week.
“The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) is also likely to touch the 1,860 points level next week,” he told Bernama.
Bank Negara Malaysia in a statement said Malaysia’s GDP expanded 5.9% in the fourth quarter of 2017 from a year earlier, driven mainly by private sector demand, with support from the external sector, while the 2017 full-year GDP grew 5.9% against the 4.2% expansion in 2016.
The central bank said the outlook for 2018 remained favourable, supported by domestic demand.
Nazri said that the ringgit is also expected to be higher next week amid a stronger current-account surplus of RM12.9 billion in the fourth quarter last year.
“The rebound in the ringgit to currently quote at 3.8-level, recovery in oil prices as well as positive sentiment on global equity markets, will boost the FBM KLCI’s performance and increase investors’ confidence,” he added.
Meanwhile, Maybank Investment Bank in a note said in the first half of 2018 (1H2018) Market Outlook session, it expects fiscal stimulus pre-GE14 (General Election-14) and Bank Negara’s overnight policy rate (OPR) hike to be the two main thematics driving investment.
“But for the longer term play, the focus is on multi-year orderbook replenishment in infrastructure construction, tourism and Look East Malaysia.
“Fiscal stimulus in the lead up to the general election will be those in the consumer sector as a boost to disposal income is expected to continue and will be front loaded in 1H2018.
‘While for the OPR, it will benefit banks and it is believed, contractors will have the highest potential of winning jobs for the upcoming megaworks,” it added.
On a Thursday-to-Friday basis, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) finished 18.46 points higher at 1,838.28.
The FBM Emas Index jumped 142.43 points to 13,117.49, the FBMT100 Index appreciated 127.74 points to 12,829.58 and the FBM Emas Syariah Index fell 132.54 points to 13,145.10.
On a sectoral basis, the Plantation Index gained 50.94 points to 7,996.97, the Industrial Index declined 18.70 points to 3,202.66, while the Finance Index increased 137.94 points to 17,594.41.
Weekly turnover went down to 6.46 billion units worth RM7.76 billion from 15.68 billion units valued at RM16.43 billion.
Main market volume fell to 4.08 billion shares valued at 7.30 billion from 10.01 billion units worth RM15.42 billion.
Warrant turnover decreased to 1.24 billion units worth RM242.26 million from 2.79 billion units valued at RM566.26 million last week.
The ACE market slipped to 1.10 billion shares worth RM205.73 million from 2.83 billion units worth RM432.96 million previously.
The local market was closed on Friday for the Chinese New Year celebration.
The gold futures contract on Bursa Malaysia Derivatives is likely to extend gains next week as investors remain cautious on global equity markets and a weaker US dollar, said an analyst.
OANDA Corp Head of Trading for Asia Pacific, Stephen Innes said higher US inflation combined with the US dollar exhibiting zero correlation to higher interest rates amidst burdening dual deficits, should play out favourably for the gold markets.
“Gold is in a perfect spot to extend gains. Higher US inflation as expressed through the higher consumer price index data is positive. We could see a more significant move into gold if equity prices start to lose traction,” he told Bernama.
Another dealer said Bursa gold futures market might track closely the movement of COMEX gold’s Friday close to get direction of the week.
The local gold market traded higher throughout the holiday shortened week in line with COMEX gold.
The market was traded half-day on Thursday and closed on Friday for the Chinese New Year celebration.
On a Thursday-to-Friday basis, February 2018 increased 46 ticks to RM169.40 a gramme, March 2018 rose 37 ticks to RM169.65 a grame, April 2018 jumped 49 ticks to RM170.45 a gramme and May 2018 went up 37 ticks to RM170.20 a gramme respectively.
Weekly turnover eased to 15 lots worth RM286,365 from last week’s 26 lots valued at RM436,615, while open interest eased slightly to 72 contracts from 75 contracts. — Bernama