KUALA LUMPUR – Bursa Malaysia is expected to keep to the sideways next week amid cautious market sentiment, mainly from the external front, but the key index will stay above the psychological level of 1,500, dealers said.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid expects the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) to move in a tight range of between 1,535 and 1,545.
He said the local bourse would continue to experience fluctuations as the date for the United States Federal Open Market Committee (FOMC) meeting draws nearer.
“It looks like the US Fed is likely to maintain its hawkish stance should the non-farm payroll data and the unemployment numbers in December show further improvement,” he said.
“If that would be the case, then the labour market is deemed to be in a tight condition whereby employers are having a tough time looking for employees, which would translate into higher wages in order to lure them to work. As such, one shall expect erratic movements in equity prices globally next week.”
The FOMC’s first meeting for the year is scheduled on January 25-26, while Bank Negara Malaysia’s first Monetary Policy Committee meeting for 2022 will be held on January 19-20.
Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng is also anticipating the FBM KLCI to remain trending sideways with immediate support at 1,530 and resistance at 1,570.
“I think the stamp duty cap at RM1,000 will eventually draw back investors, but overall, the sentiment both locally and regionally is still not very stable. There is still upside, but we have to be cautious,” he said.
The stamp duty for the trading of shares has been raised to 0.15% from 0.1%, but has been capped at RM1,000, beginning January 1, 2022 until December 31, 2026.
For the week just ended, the local bourse had been impacted by profit-taking activities following the year-end window dressing activities, worries over new coronavirus variants, US Treasury yields and its bond tapering moves, as well as firmer crude oil and crude palm oil prices.
On a Friday-to-Friday basis, the FBM KLCI fell 24.42 points to end the week at 1,543.11 from 1,567.53 previously.
On the index board, the FBM Emas Index was up 91.37 points to 11,217.42, the FBMT100 Index erased 111.49 points to 10,903.64, and the FBM Emas Shariah Index lost 203.62 points to 12,059.48.
The FBM 70, however, surged 117.46 points to 14,327.41 and the FBM ACE jumped 272.43 points to 6,692.03.
Sector-wise, the Financial Services Index advanced 141.78 points to 15,707.424, the Plantation Index climbed 166.72 points to 6,718.83, and the Energy Index garnered 18.98 points to 722.85.
The Industrial Products and Services Index slipped 0.44 of-a-point to 202.27, the Technology Index inched down 0.44 of-a-point to 96.17 and the Healthcare Index shed 33.16 points to 2,303.16.
Weekly turnover increased to 17.76 billion units worth RM9.18 billion compared with 11.53 billion units valued at RM8.21 billion in the previous week.
The Main Market volume expanded to 9.05 billion shares worth RM7.58 billion against 6.52 billion shares valued at RM7.18 billion in the prior week.
Warrants volume improved to 990.62 million units worth RM123.12 million, from 776.02 million units valued at RM98.11 million previously.
The ACE Market volume rose to 7.68 billion shares worth RM1.46 billion versus 4.18 billion shares valued at RM907.35 million in the previous week.
Meanwhile, the ringgit is expected to trade sideways with a downward bias against the US dollar next week, an analyst said.
The analyst noted that rising US treasury yields and the expectation of higher interest rates following the release of the US FOMC meeting minutes for December have pressured the ringgit.
“With the US FOMC’s first meeting for this year scheduled on January 25-26, investors are keeping a close eye on the meeting’s outcome for the rate hike decision. Hence, I would suggest a range of 4.20 to 4.22 level against the greenback next week,” he said.
For the week just ended, the ringgit traded lower, except on Friday as steadier crude oil prices lent support to the local currency.
However, it ended the first trading week of 2022 lower versus the US dollar at 4.2070/2080 at Friday’s close compared with 4.1650/1680 a week earlier.
The local currency also traded lower against other major currencies against the previous Friday.
It depreciated against the Singapore dollar to 3.0958/0981 from 3.0872/0899 last Friday and weakened vis-à-vis the Japanese yen to 3.6320/6336 from 3.6186/6212 in the previous week.
The ringgit fell against the euro to 4.7602/7640 from 4.7194/7228 and decreased against the British pound to 5.6999/7037 compared with 5.6277/6318 on Friday last week. – Bernama, January 8, 2022
