KUALA LUMPUR – Bursa Malaysia is likely to continue trading on a cautious tone amid heightened volatility, partly due to the discovery of a new Covid-19 variant in South Africa and rising new infection cases in Europe, said an analyst.
Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng anticipates the FTSE Bursa Malaysia KLCI (FBM KLCI) to hover between 1,500 and 1,520 next week with immediate support-resistance level at 1,500-1,535.
“We expect bargain-hunting activities to emerge next week with focus on glove, oil and gas counters,” he said.
Yesterday, Malaysia saw its Consumer Price Index (CPI) increase 2.9% year-on-year to 123.7 in October 2021 against 120.2 due to the rising fuel prices and the discontinuation of electricity discount in September 2021.
The CPI, a measure of inflation, for the coming months would be influenced by external factors such as the rise in global crude oil and food prices.
Overall, the local bourse was traded weaker during the week just ended due to lack of fresh market moving news.
The FBM KLCI ended the week at a three-month low of 1,512.22 as investors continued to shed their holdings amid weak sentiment. A dealer said a recent batch of corporate earnings also offered little direction for the market.
On a separate development, the ringgit is projected to stay weak next week as the increasing Covid-19 cases with a new variant and the likelihood of the US Federal Reserve (Fed) to accelerate the tapering pace are set to provide a strong support for the US dollar.
Sell-off in the domestic currency market continued for the ninth straight day yesterday.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said he expected sentiment for next week will not be much different.
He said key data points such as the US Institute for Supply Management Indices, non-farm payroll and the jobless rate will be closely monitored.
On December 1, the Fed will release the latest US Beige Book Report on current economic conditions.
“So far, the US economy has been cruising quite well. This could motivate the Fed officials to consider removing the monetary policy accommodation as an immediate priority.
“Also, we shall see how the Opec+ would decide on the production quota especially in the context of higher supplies following the release of petroleum reserves from key countries such as the US and China,” he said.
It was also reported that a new Covid-19 variant was found in South Africa. The heavily mutated variant is known as B.1.1.529.
Hence, he said, any movement would be in a tight range for the ringgit. – Bernama, November 27, 2021
