Bursa to trade higher next week on higher ringgit, oil prices

KUALA LUMPUR: Bursa Malaysia is expected to continue its upward momentum into next week, driven by an improved ringgit and rising oil and crude palm oil prices.
Affin Hwang Investment Bank Vice-President and Retail Research Head Datuk Dr Nazri Khan Adam Khan said positive statement from the US Federal Reserve and more global central bank stimulus (by Europe, China and Japan) will also bolster the index next week.
He said the Federal Reserve on Wednesday revised its "dot plot" projections to indicate it would raise interest rates twice this year, rather than four.
"This is supported by the positive performance of currencies such as the ringgit, euro, Swiss franc and yen, which were back above the levels seen in seven months, as the European Central Bank signalled further easing and the Bank of Japan announced it was adopting negative interest rates," he told Bernama.
On the domestic front, Nazri said Bursa should continue to get a respite as Bank Negara Malaysia also recently cut the country's statutory reserve ratio by 0.5% along the lines of "easing monetary policy", "adding to stimulus" and "boosting lending and investment".
Nazri said the FBMKLCI should continue to rise, driven by plantation and banking counters – albeit at a slower pace after being overbought after the strong momentum in commodity prices.
"Overall, we are of the view that the local bourse will trend higher on potential Central Banks' stimulus and more dovish Federal Reserve statement.
"We sense a good buy investment strategy now especially on emerging trading interest in plantation and oil and gas stocks," said Nazri.
On a weekly basis, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) finished 19.8 points higher at 1,716.34.
The FBM Emas Index jumped 173.11 points to 11,909.29, the FBMT100 Index appreciated 163.9 points to 11,612.00 and the FBM Emas Shariah Index soared 109.34 points to 12,518.62.
On a sectoral basis, the Plantation Index gained 54.12 points to 8,037.55, the Industrial Index gained 3.76 points to 3,291.19 while the Finance Index surged 329.34 points to 14,711.17.
Weekly turnover eased to 8.26 billion units valued at RM10.3 billion, from 9.61 billion units worth RM9.99 billion last week.
Main market volume decreased to 5.81 billion shares valued at RM9.87 billion, from 6.89 billion shares valued at RM9.52 billion previously.
Warrant turnover declined to one billion units valued at RM181.94 million, from 1.01 billion units worth RM579.96 million last week.
The ACE market jumped to 1.44 billion shares worth RM247.29 million, from 1.71 billion shares valued at RM271.79 million previously. — Bernama