KUALA LUMPUR, Jun 11 – Bursa Malaysia is likely to ease next week on lack of local leads and with sentiment weighed down by the growing concern about the coming Brexit referendum. The referendum, to be held on June 23, 2016, will decide whether Britain should exit or remain in the European Union (EU).
Affin Hwang Investment Bank Vice-President and Retail Research Head, Datuk Dr Nazri Khan Adam Khan, said the uncertainty surrounding Brexit has caused most central banks in Japan and EU countries to hold onto their stimulus packages. He said that the central banks are not willing to proceed with any stimulus plans pending the outcome of the referendum at the moment.
Nazri Khan said the increase in Bank Negara Malaysia’s international reserves from RM300 million to RM382.6 billion (equivalent to US$97.3 billion) as at May 31, however, should cushion any weaknesses. He said that the surge may also strengthen the ringgit against the US dollar.
He said the Federal Open Market Committee (FOMC) meeting from June 14-15, 2016, will also be closely monitored by investors following the US Federal Reserve Chair Janet Yellen’s recent statement of a possible interest rate increase. Nazri Khan said with all these factors, they expect trading levels to trend lower at between 1,640.00 and 1,630.00.
For the week just-ended, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) eased 9.29 points to 1,641.22, as investors remained on the sidelines ahead of the FOMC meeting next week and weak China export data despite the ringgit’s appreciation against the US dollar and higher oil prices.
On a week-to-week basis, the FBM Emas Index rose 39.06 points to 11,500.57, the FBMT 100 Index gained 38.01 points to 11,192.05 and the FBM Emas Syariah Index was 73.41 points higher at 12,056.71. On a sectoral basis, the Finance Index fell 86.18 points to 14,191.10 and the Industrial Index shed 1.04 points to 3,082.22.
The Plantation Index advanced 96.71 points to 7,577.29. Weekly turnover increased to 8.55 billion units worth RM8.25 billion from 7.19 billion units valued at RM13.13 billion last week. Main market volume fell to 5.61 billion shares worth RM7.73 billion from 5.67 billion shares worth RM12.80 billion previously.
Warrant turnover improved to 1.05 billion units valued at RM150.50 million from 736.10 million units valued at RM110.40 million last week. The ACE market declined to 1.88 billion shares worth RM364.59 million from 2.12 billion shares worth RM388.36 million previously. — Bernama