Bursa expected to stage 'oversold bounce' in coming week

On a weekly basis, the KLCI dropped 20.04 points from 1,456.74 at the end of the previous week. (Photo by Low Yen Yeing/The Edge)

On a weekly basis, the KLCI dropped 20.04 points from 1,456.74 at the end of the previous week. (Photo by Low Yen Yeing/The Edge)

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KUALA LUMPUR (June 25): Bursa Malaysia is expected to stage an “oversold bounce” next week after the steep correction seen for the past three months, moving in the 1,450-1,480 range, a dealer said.

Going forward, Inter-Pacific Asset Management Sdn Bhd executive director and fund manager Datuk Dr Nazri Khan Adam Khan said the benchmark FBM KLCI is expected to rebound higher on bargain-hunting activities as traders come back into play to grab both higher and lower liners. 

"I will call this an oversold bounce because the index has been oversold for the last three months, in which we were down for 10 out of 12 weeks. That is considered as extremely oversold. 

"Despite that, the broader market outperformed other regional markets, which means our correction is lower as our economic data is still resilient. Consumer spending is still strong," he told Bernama. 

He also noted that Bursa should continue its uptrend, supported by the country’s Consumer Price Index figure, which increased 2.8% year-on-year to 126.6 in May 2022 from 123.1 in May 2021.

"We are relatively better in terms of economic data, sentiment and the KLCI movement because we are driven by commodity stocks that cushion our broad stock market, especially [related to] oil," he said. 

Nazri added that there are plenty of opportunities to grab as stocks are seen to be cheaper and dividends higher, coupled with a lot of catalysts to cushion against a big crash, although the market is likely to see a downtrend in the medium term.

For the week just ended, the local bourse was traded mixed due to heavy selling pressure and cautious investor sentiment on concerns over inflation as market sentiment improved across the region.

On Friday (June 24), the FBM KLCI increased 5.65 points, or 0.39%, to 1,436.70 from Thursday’s close at 1,431.05.

On a weekly basis, the benchmark index dropped 20.04 points from 1,456.74 at the end of the previous week.

On the index board, the FBMT100 Index declined 138.83 points to 9,998.18, the FBM Emas Shariah Index fell 111.85 points to 10,414.64, the FBM Emas Index decreased 140.48 points to 10,257.39, the FBM ACE slipped 64.09 points to 4,769.89 and the FBM 70 weakened 170.26 points to 12,444.15.

Sector-wise, the Plantation Index lost 300.50 points to 6,917.73, the Industrial Products and Services Index went down 3.03 points to 183.37, and the Energy Index trimmed 42.40 points to 677.49.

The Financial Services Index shed 341.39 points to 15,964.45, the Healthcare Index lost 20.07 points to 1,649.74 and the Technology Index inched down 0.38 of a point to 62.62.

Weekly turnover was lower at 12.96 billion units valued at RM8.49 billion against 13.95 billion units valued at RM11.06 billion last week.

The Main Market volume narrowed to 7.81 billion shares worth RM7.07 billion from 8.34 billion shares worth RM9.84 billion in the previous week.

Warrant volume shrank to 2.41 billion units valued at RM1.41 million versus 2.64 billion units valued at RM468.76 million previously.

The ACE Market volume fell to 2.73 billion shares worth RM907.96 million from 2.95 billion shares worth RM745.4 million the week before.

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