Monday, May 13, 2013

KUALA LUMPUR: BURSA MALAYSIA is likely to trend higher this week on stronger regional sentiments and a strong performance of the ringgit following an influx of foreign funds and an accommodative stance from Bank Negara.

Affin Investment Bank vice-president and head of retail research Dr Nazri Khan is confident that with the political overhang out of the way, the local market should gradually move higher on global liquidity, play catch-up and narrow the gap with regional peers given its recent underperformance.

"The local benchmark FBM KLCI is expected to hit the 1800-level (led by the properties and construction sectors) as the focus shifts to the continuity of pro-economic growth policies following the win by the incumbent BN government on May 5," he told Bernama.

Nazri said the local market should also get support from the central bank’s decision at its latest monetary policy meeting to leave the overnight policy rate unchanged at 3%.

"Amidst the still benign inflation, the pause in the policy rates should be supportive of higher equity prices," he said.

On the technical front, he is pegging immediate resistance at between 1800 points and an all-time high of 1826.22, while support is estimated at between the 1740 and 1720 levels.

Meanwhile, during the week just ended, blue chips extended profit-taking correction while trading momentum shifted to lower liners and small-cap stocks on rotational play such as Cliq Energy, LBS, Karambunai, Olympia and Johan Holdings, he said. Nazri added the market breadth continued to be positive as average daily gainers led losers five to two on robust trade averaging 2.1 billion shares worth RM2.4bil per day.

On a Friday-to-Friday basis, the benchmark FBM KLCI ended 77.61 points firmer to 1,772.38.

The Finance Index increased sharply by 854.89 points to 16,706.38, the Plantation Index jumped 361.89 points to 8,325.50 and the Industrial Index rose 119.08 points to 2,955.10.

The FBM Emas Index surged 655.74 points to 12,212.71, the FBMT100 soared 614.34 points to 12,020.26, the FBM Ace Index chalked up 450.15 points to 4,352.27 and the FBM Mid 70 shot up 1,064.58 points to 13,825.96.

Weekly turnover rocketed to 11.54 billion shares worth RM17.29bil from previous week’s 3.23 billion shares worth RM7.97bil.

Main market volume more than tripled to 10.43 billion shares valued at RM17.08bil from 2.78 billion shares valued at RM7.87bil previously.

By Bernama