KUALA LUMPUR (July 5): Maybank Investment Bank Bhd said it remained "cautious" on the Malaysian share market during this year's third and fourth quarters amid uncertainties from the UK's European Union exit (Brexit) decision.

Maybank said in a note today it expected market volatility in the next few months as major central banks reacted to Brexit uncertainties in addition to China's economic growth and the US presidential election concerns.

"Domestic (Malaysian) catalysts are lacking as corporate earnings growth stays slow. Against these backdrops, we believe the KLCI's near-term direction will remain very much driven by the external developments.

"We continue to take a defensive stance in equity positioning, but we will stay watchful for momentum/trading opportunities amid the volatility," said Maybank, which maintained its end-2016 FBM KLCI target at 1,710 points.

At 12:30pm today, the KLCI fell 4.13 points to settle at 1,650.71. Bursa Malaysia said today's trading would be opened for the morning session only and there would be no afternoon trading in conjunction with Hari Raya Aidilfitri tomorrow (July 6).

Bursa Malaysia said the exchange will be closed tomorrow and this Thursday (July 7).

Today, Maybank said the US presidential election this Nov 8 was deemed a critical determinant of the KLCI's direction this year.

Maybank said the outcome of the election could affect US foreign policies.

"Our base case assumes a non-protectionist candidate coming into office. Under such an outcome, we think the KLCI will end the year on a positive note, taking it up to beyond the 1,700 level," it said.