KUALA LUMPUR – Bursa Malaysia is expected to trade higher next week, riding on strong catalysts including the United States’ US$1.9 trillion (RM7.73 trillion) Covid-19 relief package, the roll-out of vaccination programmes worldwide and higher commodity prices.
“Bursa Malaysia is expected to be in consolidation mode with an upward bias to trade between 1,590 and 1,600 points next week,” Inter-Pacific Asset Management Sdn Bhd chief executive officer Datuk Nazri Khan Adam Khan told Bernama.
He said that if adopted, US President Joe Biden’s relief package would have positive spillover regionally and Bursa Malaysia would be included.
Crude oil hitting a one-year high at above US$55 per barrel also benefited the local bourse, he said.
Noting that the FTSE Bursa Malaysia KLCI (FBM KLCI) is 30%-linked to commodities, he said the rise in oil prices, especially crude oil, would, therefore, boost the index.
“Another factor that will lift the market next week and onwards is the government’s aggressive vaccination programme.
“We also saw our daily cases drop from 5,000 to 4,000 and yesterday it went down to the 3,000 level. We hope the number of cases will continue to reduce, which is a good sentiment to the market,” he said.
On Thursday, Prime Minister Tan Sri Muhyiddin Yassin announced the National Covid-19 Immunisation Programme which is set to roll out at end-February – the country’s biggest vaccination effort ever.
Muhyiddin said that 80% of the country’s population, or about 26.5 million people, are expected to receive the vaccine free of charge.
Meanwhile, Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said that next week, the market will also be focusing on Malaysia’s fourth quarter (Q4) 2020 gross domestic product (GDP), scheduled to be released on February 11.
He noted that neighbouring Indonesia saw its economy fall slightly more than expected in Q4, leading to its first full-year contraction in over two decades, as it struggled with the fall-out from the Covid-19 pandemic.
“Perhaps Indonesia’s GDP should give some flavour as to how Malaysia’s GDP grew in Q4 2020. Therefore, we expect investors to remain on the sidelines ahead of the GDP announcement with the FBM KLCI trading in a tight range of 1,575 to 1,590 points.
“Any better-than-expected data could push the FBM KLCI beyond 1,600 points,” he said.
Brokerage firm Malacca Securities Sdn Bhd said given that economic activities may restart in the near term, it expected trading interest may develop within the recovery sectors such as construction, building materials, property and gaming.
Meanwhile, technology, furniture as well as vaccine-related counters should keep an upbeat tone.
On a Friday-to-Friday basis, the benchmark FBM KLCI rose 12.23 points to 1,578.63 from last week’s 1,566.40.
On the scoreboard, the FBM Emas Index increased 138.51 points to 11,502.32 and the FBMT 100 Index rose 124.63 points to 11,229,56.
The FBM 70 jumped 312.48 points to 15,059 and the FBM Emas Shariah Index surged 874.50 points to 13,062.36, but the FBM ACE Index eased 171.71 points to 10,861.23.
Sector-wise, the Financial Services Index lifted 115.84 points to 14,579.90, the Industrial Products and Services Index gained 7.36 points to 176.55, and the Plantation Index rose 42.82 points to 7,140.71.
The Energy Index added 46.18 points to 839.32, the Technology Index inched up 3.96 points to 85.92, but the Healthcare Index slipped 20.35 points to 3,577.50.
In the holiday-shortened week, turnover increased to 26.16 billion units worth RM17.66 billion from 25.57 billion units worth RM21.23 billion recorded in the previous week.
Main Market volume eased to 14.94 billion shares valued at RM13.54 billion versus 15.34 billion shares valued at RM17.64 billion last week.
Warrants turnover slid to 1.74 billion units worth RM307.50 million against 2.04 billion units worth RM320.29 million previously.
The ACE Market volume slipped to 9.47 billion shares valued at RM3.80 billion from 8.19 billion shares valued at RM3.26 billion last week. – Bernama, February 6, 2021
