Bursa Malaysia likely to trend higher next week on foreign buying

KUALA LUMPUR: Bursa Malaysia is likely to trend higher next week after recording gains over the past five consecutive weeks amid follow-through foreign buying.

Inter-Pacific Securities Sdn Bhd Head of Research Pong Teng Siew expected foreign investors would remain as the net buyers in the local equity market in the near term of a month or so, and continue to push the key index upwards.

“Therefore, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) is likely to trade between 1,823 and 1,890 next week on continuous buying by foreign investors,” he told Bernama.

Pong viewed the foreign inflows as a cycle, especially after the international investors dumped nearly RM12 billion worth of local equities in early May this year.

“I view this as a transition period as foreign funds have consistently been the net buyers on Bursa Malaysia for the past three weeks,” he said.

Asked how the Pakatan Harapan (PH)-led government's first 100-day fiscal reforms would influence the local market especially with the Aug 17 deadline approaching, Pong said he did not see any residual impact on the local bourse currently.

“I do not think PH's 100-day manifesto would drive the local market at the moment, unless political decisions such as the cancellation of certain infrastructure or construction projects are made, just like what had happened previously, only then we can see the impact on related stocks.

“But that (situation) is over,” he added.

For the week just-ended, Bursa Malaysia was traded mostly higher at between 1,777.78 and 1,812.69, mainly buoyed by continued foreign buying, but was capped by profit-taking on Friday.

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The benchmark index breached the 1,800 psychological level to close at an intra-day high of 1,804.73 points on Wednesday with foreign funds snapping up RM229.6 million worth of local stocks, making it the largest inflow in a day for this month.

On a Friday-to-Friday basis, the benchmark FTSE Bursa Malaysia KLCI was 25.66 points higher at 1,805.75 from 1,708.09 previously.

The FBM Emas Index advanced 170.01 points to 12,770.49 and the FBMT100 Index bagged 159.19 points to 12,546.84.

The FBM 70 put on 126.41 points to 15,588.78, the FBM Ace climbed 103.36 points to 5,549.40 and the FBM Emas Syariah Index was up 204.42 points to 12,948.88.

On a sectoral basis, the Finance Index perked up 135.72 points to 17,576.18, the Plantation Index improved 89.44 points to 7,712.83 but the Industrial Index was 6.77 points lower at 3,269.35.

Weekly turnover widened to 11.93 billion units worth RM11.07 billion from 11.17 billion units valued at RM10.70 billion previously.

Main market volume rose to 7.52 billion shares worth RM9.99 billion compared with 6.65 billion shares valued at RM9.68 billion.

Warrants turnover, however, fell to 2.10 billion units worth RM509.46 million against 2.20 billion units valued at RM584.34 million.

The ACE market volume slipped to 2.29 billion shares worth RM573.79 million versus 2.31 billion shares valued at RM428.57 million.

Gold futures contract on Bursa Malaysia Derivatives is expected to trade lower next week in tandem with the New York Commodity Exchange's (Comex) gold market as the US dollar is likely to continue strengthening.

Phillip Futures Sdn Bhd Derivative Dealer Lee Pei Wan said the continued strengthening of the greenback would make gold bullion more expensive for holders of other currencies.

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“Not many people will be interested to buy gold if the US dollar continues to strengthen,” she told Bernama.

For the week just-ended, gold futures recorded its fifth consecutive weekly fall, tracking the Comex, derailed by the stronger US dollar.

Gold futures were untraded for three of the five trading days on lack of trading interest due to the stronger greenback.

On a Friday-to-Friday basis, August 2018 eased four ticks to RM159.50 a gramme, September 2018 lost eight ticks to RM159.50 a gramme, while October 2018 and November 2018 fell 10 ticks each to RM159.60 and RM160.40 a gramme respectively.

Weekly turnover fell to three lots valued at RM48,160 from seven lots valued at RM112,100 in the previous week, while open interest improved to 36 contracts from 33 contracts previously. — Bernama

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