KUALA LUMPUR: Bursa Malaysia is expected to trade higher next week, supported by strong economic activities globally and locally, said Affin Hwang Investment Bank Vice-President/Head of Retail Research Datuk Dr Nazri Khan Adam Khan.
Nazri said the equity market has a strong correlationship with oil prices and as the commodity’s price increased to above US$65 (RM252) per barrel, Malaysia, as the net oil importer, would benefit.
“I expect the oil price to continue rising,” he told Bernama.
He said the strong oil prices had boosted the local bourse, of which about 30% of companies on Bursa Malaysia were directly and indirectly involved in the oil and gas industry.
The strong participation at Invest Malaysia Kuala Lumpur from Jan 23-24, 2018, which attracted over 2,000 participants compared to 1,500 last year, also helped give Bursa Malaysia a boost, he said.
“There were a lot of investors from India and China. We managed to make good pitching to attract potential investors in the equity or bond markets and I believe the outcome will augur in acting as catalyst to boost the fund volume in the local exchange,” he said.
For next week, he said, the FBM KLCI would likely move between 1,850 and 1,860 points.
Meanwhile, the finance-related counters, according to Nazri, would also be on uptrend next week onwards, following the Bank Negara Malaysia’s decision to increase the overnight policy rate (OPR) by 25 basis points to 3.25%.
“The OPR at the Monetary Policy Meeting today would provide positive spillover effect on the capital market, especially the banking sector, as this could positively expand their margins and earnings,” Nazri was reported as saying.
However, on short term basis, the Asian stock markets’ challenges, including the Bursa Malaysia, would be US President Donald Trump’s speech, scheduled on Jan 30, 2018.
Trump is expected to deliver his first State of the Union address, marking the first year of his presidency.
“We hope that he will not announce any new policies that could affect trade,” he said.
For the week just-ended, Bursa Malaysia was traded mostly higher, tracking the Asian stock markets.
It was also supported by positive local development including strong trade figures and Bank Negara Malaysia’s interest rate increase.
On a Friday-to-Friday basis, the FBM KLCI rose 25.09 points to end the week at 1,853.92.
On the scoreboard, the FBM Emas Index jumped 178.68 points to 13,374.50, FBMT 100 Index increased 186.12 points to 13,046.72, FBM Emas Syariah Index lost 580.74 points to 13,046.72, FBM 70 rose 270.79 points to 16,734.16 and the FBM Ace fell 39.19 points to 6673.93.
On a sectoral basis, the Finance Index surged 434.39 points to 17,671.37, Plantation Index added 43.34 points to 8,081.21 and the Industrial Index gained 30.19 points to 3,398.21.
Total turnover slipped to 17.38 billion units valued at RM12.98 billion from 25.35 billion units valued at RM15.97 billion last week.
Main Market fell 11.21 billion units valued at RM11.77 billion from 17.14 billion shares worth RM14.73 billion previously.
Warrants turnover rose to 3.35 billion units worth at RM1.40 billion from 2.64 billion units worth RM448 million last week.
The ACE Market narrowed to 2.45 billion shares valued at RM628.96 million versus 5.51 billion shares valued at RM778.77 million previously. — Bernama