Bursa expected to trade with downside bias in coming week

On Friday (June 10), the KLCI lost 1.04% or 15.76 points to end at 1,493.95, with 667 losers against 254 gainers. (Photo by Low Yen Yeing/The Edge)

On Friday (June 10), the KLCI lost 1.04% or 15.76 points to end at 1,493.95, with 667 losers against 254 gainers. (Photo by Low Yen Yeing/The Edge)

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KUALA LUMPUR (June 11): Bursa Malaysia is expected to trade with a downside bias next week, in line with the movement of the global equities market, moving between the 1,480 and 1,490 level, a dealer said.

Inter-Pacific Asset Management Sdn Bhd executive director and fund manager Datuk Dr Nazri Khan Adam Khan said the benchmark FBM KLCI, which broke its psychological level of 1,500 on Friday (June 10), is expected to slide further.

He said with rising US inflation, which is currently at 8.3%, the potential of a higher interest rate hike by the European Central Bank, as well as new Covid-19 lockdowns in China, would weigh on global market sentiment.

“Brent crude oil, which is expected to move higher to around US$150 (about RM660.30) to US$175 per barrel due to the Ukraine-Russia conflict, would exacerbate the risk of higher inflation and affect global growth.

“Slow global growth would prompt a risk-averse sentiment and more investors will move out of risk assets and get into safe-haven assets such as bonds and gold,” Nazri told Bernama.

However, he noted that Malaysia’s economy is still holding up fundamentally with accommodative interest rates, growing manufacturing sales, strong exports as well a low inflation rate.

For the US, he noted that although the inflation rate is high, lingering above 8% with high consumer spending, the economy would still keep going and there is no sign of a recession in the near term.

For the holiday-shortened week which just ended, the local bourse continued the previous week’s slide amid negative sentiment surrounding the region and taking its cue from the Wall Street performance.

The market was closed on Monday (June 6) for the Yang di-Pertuan Agong’s birthday.

On Friday, the KLCI lost 1.04% or 15.76 points to end at 1,493.95, with 667 losers against 254 gainers.

On a weekly basis, the KLCI slipped 43.87 points to end the week at 1,493.95 from 1,537.82 in the previous week.

On the index board, the FBMT100 Index declined 273.38 points to 10,429.35, the FBM Emas Shariah Index dipped 367.25 points to 10,997.24, the FBM Emas Index decreased 279.29 points to 10,733.65, the FBM ACE slipped 137.59 points to 5,134.36 and the FBM 70 weakened 210.61 points to 13,113.58.

Sector-wise, the Plantation Index lost 314.98 points to 7,596.65, the Industrial Products and Services Index went down 6.44 points to 193.33, and the Energy Index narrowed by 27.14 points to 783.67.

The Financial Services Index fell 198.66 points to 16,420.13, the Healthcare Index shed 67.46 points to 1,811.24 and the Technology Index inched down 1.95 points to 67.76.

Weekly turnover was lower at 11.03 billion units valued at RM7.49 billion against 14.14 billion units valued at RM13.99 billion last week.

The Main Market volume narrowed to 6.42 billion shares worth RM6.28 billion versus 10.53 billion shares worth RM13.14 billion in the previous week.

The warrant volume went up to 1.65 billion units valued at RM291.43 million against 1.55 billion units valued at RM288.17 million previously.

The ACE Market volume strengthened to 2.94 billion shares worth RM916.51 million from 2.05 billion shares worth RM556.59 million the week before.