KUALA LUMPUR – The local bourse is expected to rebound strongly next week, with the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) set to test the psychological level of 1,700 amid window-dressing activities and improved market sentiment.
Inter-Pacific Asset Management Sdn Bhd chief executive Datuk Nazri Khan Adam Khan said the key index is poised to march into the new year on a high note, riding on the “Santa Claus rally” as investors turn bullish towards year-end.
“Traditionally, the last week of December and the first week of the new year are the strongest weeks of the year, therefore, I believe the FBM KLCI will move higher between 1,680 and 1,700,” he told Bernama.
He said the market sentiment will be positive due to rising commodity prices, a stronger ringgit to the US dollar, optimism over Covid-19 vaccine distribution in Malaysia next year, and a smooth free trade deal between Britain and the European Union.
The overall market volume will be thin in the next two weeks as a majority of institutional buyers will be inactive due to the holidays, but the market momentum will be supported by buying in small-capitalisation stocks, he said.
Bursa started the week on a weak note as investor sentiment was affected by concerns about the global economic outlook, and the risk appetite continued to drift away the following day on mounting concerns over a new coronavirus strain in the United Kingdom and weak oil prices.
Nevertheless, the local market snapped its losing streak on Wednesday as bargain-hunting emerged ahead of the long weekend break on promising news of a vaccine delivery by pharmaceutical company AstraZeneca that is expected to take place in the first half of next year.
However, the FBM KLCI reversed its gains on Thursday due to profit-taking amid a cautious market sentiment, before taking a break for Christmas yesterday. – Bernama, December 26, 2020
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