Bursa Malaysia is expected to be on an uptrend next week, driven by the steady ringgit as well as the “feel good” sentiment in the external market, with the release of strong economic data in the United States.
Affin Hwang Investment Bank Vice-President/Head of Retail Research Nazri Khan Adam Khan said the steady ringgit at RM4.28 against the US dollar, was a good sign for the local stock market as it reflected improved foreign fund inflows.
“The environment outside Malaysia is also positive with the strong performance of regional bourses, upbeat US private sector job figures and signs of improvement in the global economy.
“All of these factors will translate into higher optimism in corporate earnings, thus providing a boost for Bursa Malaysia,” he told Bernama.
He said Japan’s Nikkei share average recorded its highest close since mid-August 2015, climbing 1.6% to 20,177.28 on Friday.
On the local front, Nazri Khan said the merger plan between RHB Bank Bhd and AMMB Holdings Bhd would be a major catalyst for the banking sector on Bursa Malaysia next week and likely push the FBM KLCI towards the 1,800 level.
Meanwhile, Alliance-DBS Research said expectations of an earnings recovery was kept intact by a satisfactory first quarter 2017 earnings season, where 65% of companies under its coverage met expectations.
It said local equities were in a consolidation mode in May, however, given the improving fundamentals and receding external geopolitical risks, and saw this as an opportunity for investors to accumulate on weakness.
“We continue to prefer cyclical to defensive stocks and those with clear earnings growth catalysts. Our big-cap picks are Maybank, Genting and Gamuda. Among small-mid caps, we like BIMB, Sunway Construction, VS Industry, Serba Dinamik, Globetronics and Yong Tai,” Alliance-DBS Research added.
On a week-to-week basis, the FBM KLCI rose 4.65 points to 1,776.95, the FBM Emas Index gained 20.68 points to 12,682.26 and the FBMT 100 Index was up 30.97 points to 12,325.33.But, the FBM Emas Shariah Index decreased 30.11 points to 12,894.35.
The FBM 70 improved 33.21 points to 15,178.71, but the FBM Ace fell 34.4 points to 6,352.848
On a sectoral basis, the Finance Index surged 204.01 points to 16,703.87 and the Industrial Index was 24.65 points higher at 3,300.58. But, the Plantation Index fell 108.48 points to 7,955.98 .
Weekly turnover fell to 12.34 billion units valued at RM14.01 billion from 16.20 billion units valued at RM14.43 billion recorded last week.
Main Market volume decreased to 8.55 billion shares valued at RM13.4 billion from 10.45 billion shares valued at RM13.56 billion.
Warrants volume fell to 1.24 billion units worth RM133.01 million from 1.84 billion units worth RM239.50 million.
The ACE Market turnover contracted to 2.46 billion units worth RM457.36 million from 3.85 billion units worth RM536.27 million. –Bernama