KUALA LUMPUR – Bursa Malaysia is expected to continue consolidating and trade in cautious mode next week, as investors weigh the resurgence of new Covid-19 cases and its impact on the economy and companies’ earnings.
Bank Islam chief economist Mohd Afzanizam Abdul Rashid said the FTSE Bursa Malaysia KLCI (FBM KLCI) is expected to hover in a tight range of between 1,575 and 1,585.
“Despite this, it is quite heartening to note that there have been net purchases from foreign funds of late,” he told Bernama.
“Attractive valuations, and perhaps the unveiling of the 12th Malaysian Plan on September 27, as well as Budget 2022 in October, will motivate foreign investors to come to Malaysia.”
Rakuten Trade Sdn Bhd research head Kenny Yee expects FBM KLCI to remain stuck in consolidation mode next week following a mini rally in late August.
“We reckon that the uncertainty and heightened volatility on Wall Street should see overall sentiment in regional markets, as well as the local bourse, to be more cautious.”
He noted that Bank Negara Malaysia’s decision this week to maintain the overnight policy rate at 1.75% was seen as a precursor for a rate hike going forward, and coupled with regional volatility, this will have an impact on the local bourse.
Rakuten vice-president (equity research) Thong Pak Leng is of the view that with valuations of Malaysian stocks still considerably cheap compared with regional markets, foreign funds will be drawn in, and he expects to see some bargain hunting next week.
“We advise investors to look into recovery themes, such as tourism, gaming and consumer, as they have retraced recently from the jump due to market weakness, hence, any pullback could be an accumulation opportunity. We see banks as remaining a safe bet for long-term play.”
On a Friday-to-Friday basis, the benchmark index eased 13.22 points to end the week at 1,575.97 from 1,589.19 previously. – Bernama, September 11, 2021
