KUALA LUMPUR – Bursa Malaysia is expected to trade range-bound next week as investor sentiment is likely to remain cautious due to market volatility with the key index moving in a tight range, an analyst said.
Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng said the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) is anticipated to hover within the 1,515-1,530 range, with immediate resistance at 1,530 and support at 1,500.
“With the market volatility heightened again, we believe regional and local markets will be similarly affected and investors’ sentiment to remain jittery although bargain hunting may prevail,” he said.
In a note, CGS-CIMB said investors will be focusing on the release of Malaysia’s fourth-quarter 2021 gross domestic product (GDP) data next week.
“Investors will be watching the potential impact of the floods, higher electricity tariffs, implementation of ceiling prices on certain goods, rising operating costs and cukai makmur (prosperity tax) on corporate earnings,” it said.
For the week just ended, Bursa Malaysia trended mostly mixed amid heightened market volatility in the region while tracking the movement on Wall Street.
The market was traded for half a day on Monday on the eve of the Chinese New Year and was closed for two days on Tuesday and Wednesday for the Chinese New Year celebration.
On a Friday-to-Friday basis, the FBM KLCI gained 2.74 points to end the week at 1,522.76 from 1,520.02 last week.
On a separate development, the ringgit is expected to trade at current levels against the US dollar next week ahead of the release of Malaysia’s fourth quarter 2021 GDP figures on February 11.
Hence, an analyst foresees the ringgit to experience headwinds next week, trading in a range of RM4.18-RM4.19 against the greenback.
Furthermore, he said with the latest daily Covid-19 cases breaking the 7,000-case mark for the first time since October 2021, the local note would continue to face pressure.
Malaysia recorded 7,324 new Covid-19 infections yesterday, an increase of 1,604 cases from the 5,720 new infections recorded on February 3.
“However, with the improved commodity prices and weaker dollar, these will cap the ringgit to trade farther lower,” he added.
For the short-trading week just ended, the local note was mostly higher, coinciding with the gains seen in the Brent crude oil price.
The market was also closed on Tuesday and Wednesday for the Chinese New Year celebration.
On a weekly basis, the ringgit appreciated versus the US dollar to 4.1805/1810 from 4.1880/1915 a week ago.
However, the local currency traded lower against other major currencies on a Friday-to-Friday basis.
It depreciated against the Singapore dollar to 3.1096/1102 from 3.0860/0890 the previous Friday, and weakened vis-a-vis the Japanese yen to 3.6365/6372 from 3.6222/6252.
The ringgit eased versus the euro to 4.7929/7935 from 4.6621/6660 a week earlier and fell against the British pound to 5.6721/6728 from 5.6031/6078. – Bernama, February 5, 2022
