KUALA LUMPUR – Bursa Malaysia is expected to continue cautious trading next week as investors remain on the sidelines ahead of Bank Negara Malaysia’s policy meeting on Thursday.
Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said market talk has it that the central bank is likely to keep the overnight policy rate (OPR) unchanged at 1.75%.
“Sectors tied to the OPR, namely banking and finance, will then be on investors’ radar. Nevertheless, investors might have already priced in for the OPR to be maintained at 1.75%. Hence, the FTSE Bursa Malaysia KLCI (FBM KLCI) is expected to trade within a tight range of 1,600 to 1,610 points next week,” he told Bernama.
He said the coming week will also see the release of manufacturing Purchasing Managers’ Index (PMI) data for Malaysia and countries including the United States, Canada, France, Germany, India, Taiwan, Australia and Indonesia.
“The manufacturing PMI data for April will reveal if manufacturing activities in countries such as India were heavily affected by the resurgence in Covid-19 cases.”
He said economic recovery remains tilted to the downside, primarily due to uncertainty over the path of the pandemic and the effectiveness of the vaccination programme.
“Based on data from Our World in Data, the daily rate of Covid-19 vaccines administered per 100 people is lower than our peers such as Thailand and Indonesia.”
The local bourse was mostly lower in the week just ended, with continued selling in the plantation, healthcare, and consumer products and services counters.
Adam said FBM KLCI ended the day 0.4% lower at 1601.7 points yesterday, in tandem with most of its Asian peers.
Despite the US recording a 6.4% gross domestic product growth in the first quarter of 2021, which pushed the S&P500 index to an all-time high on Thursday, sentiment remains weak following China’s official gauge of factory activity, which fell more than expected last month albeit remaining in expansion territory, as both production and new orders retreated, he said.
“In addition, India’s daily Covid-19 cases reached a record high of 386,452 yesterday.”
On a Friday-to-Friday basis, FBM KLCI declined 6.78 points to 1,601.65 from 1,608.43 previously. – Bernama, May 1, 2021
