Bursa Malaysia expected to remain firm, regain upward momentum

Bursa Malaysia is expected to remain firm, trend higher and gradually re-test the 1,896.23 level as traders increase their bets on solid USA economy, Federal Reserve's dovish testimony, reduced geopolitical tension and a steady recovery of the world economy.

Affin Investment Bank vice-president and head of retail research Dr Nazri Khan Adam Khan said local stocks should get momentum from the world stocks performance which recently hit a five-year and all-time high with an impressive gain driven by a round of positive economic data and low interest rates.

"We expect many Asian bourses including Bursa Malaysia to play catch-up," he told Bernama.

He said fresh rounds of foreign funds injection would also slowly push
trades into high-yield Malaysian market, boosting local asset liquidity specifically Bursa stock market and Malaysian government bonds.

Nazri said the recent upward momentum in equity is expected to continue, given the steady follow-through Bursa Malaysia performance during last week’s session.

"Overall, the early Bursa Malaysia edge goes to the bulls with the next target at the 1,880 level, benefitting from a risk-on vibe across US and Europe.

"We reiterate that the FBMKLCI remains above its monthly uptrend line, thus is in a secular bull market.

"This means any significant periods of weakness this year should be viewed as strong buying opportunities," he said.

While local small caps consolidate with buoying sentiment, impressive rotational interest on large and mid-cap blue chips should showcase healthy risk taking with active foreign participation accumulating battered down blue-chip stocks.”

"Strategy-wise, given that the short-term trend has turned positive towards 1,880, traders should accumulate our last recommended Top Featured Stocks which include the likes of Gamuda, Bursa, IHH, IGB, Sunway, Westports, Econpile, Pintaras, Sentoria, Huayang, KSL, and Matrix," he added.

For the week-just-ended, the FBM KLCI rose 6.6 points to 1,870.99 on Friday from 1,864.31 points last Friday.

The Finance Index soared 154.6 points to 12,648.01, Industrial Index inched 2.8 point to 3,260.27 and the Plantation Index dropped 279 points to 8,590.29.

The FBM Emas Index was 23.9 points higher at 13,082.26, FBMT100 Index firmed 34.3 to 12,648.01.

The FBM 70 shed 2.8 points to 14,370.47 and the FBM Ace declined 209.1 points to 7,073.61.

Weekly turnover rose to 22.67 billion shares, valued at RM13.40 billion, from 17.14 billion shares, valued at RM11.93 billion, last week.

Main market volume increased to 18.39 billion units worth RM12.64 billion from last Friday's 12.91 billion units worth RM11.14 billion.

Warrants turnover decreased to 370 million units, valued at RM54.1 million from 745.74 million units, valued at RM162.15 million last Friday.

The ACE market volume increased to 3.8 billion shares worth 687.8 million from 3.4 billion shares worth RM603.01 million previously. – Bernama, August 23, 2014.