Bursa Malaysia Likely To Be Volatile Next Week

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KUALA LUMPUR, Jun 25 – The dealers said that the Bursa Malaysia is likely to see the volatile trading on next week due to the weak investor sentiment after the historic of referendum, Brexit, that will break the United Kingdom from the European Union.

Affin Hwang Investment Bank Vice-President/Retail Research Head, Datuk Dr Nazri Khan Adam Khan, said following the bearish performance of the global stocks, the FTSE Bursa Malaysia KLCI (FBM KLCI) could stage a correction with the 1,700-point level as the immediate target.

“At the moment investors are adopting a wait-and-see stand on the stock movements as they are cautious due to the Brexit. The investors are now shifting their interests to the safe haven assets such as bond and gold. Bursa Malaysia was expected to trade at 1,600 level for the short term,” he told Bernama.

However, he said, its performance will also depend on the ringgit’s movements against the US dollar. On the technical front, Kenanga Research Head of Research, Chan Ken Yew, said the FBM KLCI would likely remain range-bound next week, so long as it was still capped below the 1,605-1,625 resistance. 

He said as indicators have weakened, they do not rule out further correction towards the expected level in the near term. On a weekly basis, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) added 9.87 points to 1,634.05 from 1,624.18 last week. The FBM Emas Index increased by 35.89 points to 11,393.31, FBMT100 Index gained 333.14 points to 11,393.31 and the FBM Emas Syariah Index was 41.54 points higher at 11,968.84.

On a sectoral basis, the Finance Index rose by 38.98 points to 14,074.91 and the Industrial Index was 17.72 points higher to 3,071.60. The Plantation Index eased 29.1 points to 7,539.27. Weekly turnover advanced 2.33 billion units valued at RM2.3 billion from 1.12 billion units valued at RM1.42 billion last week. 

Main market volume rose to 1.35 billion shares worth RM2.17 billion from 701.96 million shares worth RM1.36 billion previously.  Warrant turnover improved to 530.20 million units valued at RM127.60 million from 151.11 million units valued at RM22.23 million last Friday. 

The ACE market added to 338.96 million shares worth RM61.84 million from 263.73 million shares worth RM37.87 million last week. Gold futures contracts on Bursa Malaysia Derivatives are expected to continue their upward momentum next week, on effects by the UK exit from the European Union.

Phillip Futures Sdn Bhd Dealer, Ler Wee Liang, expected the ringgit-based gold futures to continue its bullish momentum for some time due to a weaker ringgit against the US dollar. He said on the US-based gold side, they also predict it to be bullish in the coming week as it had broken the US$1,300 resistance level and it may continue its upside movement.

On a Friday-to-Friday basis, June 2016 rose 56 ticks to RM172.30 a gramme while July 2016, August 2016 and September 2016 increased 61 ticks each to RM172.90, RM173.20 and RM173.55 a gramme. Weekly turnover rose to 264 lots worth RM3.90 million from 237 lots valued at RM3.91 last Friday. Open interest on Friday rose to 493 contracts from 421 contracts previously. The market was closed on Wednesday for the Nuzul Al-Quran holiday. — Bernama

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