KUALA LUMPUR – The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) is anticipated to trade range-bound next week between 1,590 and 1,610 amid a lack of major catalysts to influence investors’ risk appetite.
Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said the market would likely see bargain-hunting activities as the FBM KLCI almost touched the support level of 1,600 yesterday.
“As such, we expect the index to hover in the 1,590-1,610 range next week with immediate support at 1,580 and resistance at 1,620,” he said.
Meanwhile, Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid forecast the FBM KLCI would linger at around 1,600 points next week as the latest Consumer Price Index print showed that inflation remained steady at 2.2% for two consecutive months (February and March) from 2.3% in January.
He said that given that the government continued to maintain the fuel subsidies, the inflation rate would likely remain contained.
“As for Bank Negara Malaysia, the monetary policy accommodation can be maintained as inflation continues to be fairly steady.
“In other words, policy support from the government and central bank will be the key underpinning factors for growth. However, external factors such as the US Federal Reserve, the war in Ukraine, and supply chain disruption would result in cautious sentiment among investors,” he added.
On a Friday-to-Friday basis, the FBM KLCI rose 12.96 points to end the week at 1,601.97 from 1,589.01 in the previous week.
On the index board, the FBMT100 Index added 66.65 points to 11,127.99, the FBM Emas Shariah Index rose 41.63 points to 12,089.20, and the FBM Emas Index gained 70.36 points to 11,484.06.
Meanwhile, the FBM ACE retreated 61.14 points to 5,725.36 and the FBM 70 lost 12.76 points to 13,768.59.
Sector-wise, the Plantation Index increased 242.60 points to 8,597.87, the Industrial Products and Services Index was marginally higher at 0.28 of-a-point to 214.75, and the Energy Index added 16.24 points to 767.51.
The Financial Services Index gained 212.20 points to 16,848.20, the Healthcare Index shed 7.23 points to 2,080.22, and the Technology Index inched down 0.61 of-a-point to 71.83.
Weekly turnover fell to 11.04 billion units valued at RM8.26 billion from 17.33 billion units valued at RM10.46 billion last week.
The Main Market volume decreased to 6.33 billion shares worth RM7.37 billion versus 11.55 billion shares worth RM9.33 billion in the previous week.
Warrants volume shrank to 1.04 billion units valued at RM160.21 million against 1.46 billion units valued at RM236.16 million previously.
The ACE Market volume slumped to 2.66 billion shares worth RM729.55 million from 4.30 billion shares worth RM889.94 million the week before.
Meanwhile, the ringgit is anticipated to stabilise against the US dollar next week as the US Federal Reserve (Fed) is about to enter a blackout period ahead of its two-day meeting starting May 3.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said that Fed officials would refrain from making any comments on monetary policy, lending some support to the local currency.
“We also consider the possibility of some form of a correction occurring next week as technical indicators indicate that the ringgit is in an oversold position, indicating that a correction is quite likely,” he said.
Commenting further on the trend next week, he said the resistance and support level is at RM4.34 and RM4.228 respectively.
“I suppose it would gyrate around this level and the ringgit performance is very volatile at the moment,” he added.
Meanwhile, SPI Asset Management partner Stephen Innes believes that as China imposed another lockdown and there is no end in sight to mobility restriction in China as well as the People’s Bank of China’s lack of policy easing, the ringgit will continue to weaken in tandem with the yuan.
“I think the ringgit would trade at the range of 4.3165 to 4.3475 to the US dollar next week,” he said.
On a weekly basis, the ringgit was lower against the greenback at 4.3230/3270 on Friday compared to 4.2330/2380 a week earlier.
The ringgit ended lower and reached the 4.30-level against the US dollar on Friday, a level last seen in June 2020.
In terms of year-to-date performance, the local currency has depreciated 2.75%, reflecting weak global sentiment and keeping pace with the Chinese yuan.
Meanwhile, the local unit traded lower against a basket of major currencies on a Friday-to-Friday basis.
The ringgit dropped against the Singapore dollar to 3.1633/1667 from 3.1198/1242 a week earlier, slipped vis-a-vis the Japanese yen to 3.3652/3686 from 3.3465/3510.
The local currency weakened against the British pound to 5.5641/5693 from 5.5308/5374 last week and eased versus the euro to 4.6710/6753 from 4.5776/5830 previously. – Bernama, April 23, 2022
