Bursa Malaysia to stay in consolidation mode next week

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KUALA LUMPUR (Aug 15): Bursa Malaysia is expected to remain in consolidation mode to trade at between 1,550 and 1,600 points next week, dealers said.

Rakuten Trade Sdn Bhd head of research Kenny Yee Shen Pin said there is no obvious catalyst locally and with the US-China ongoing spat, the market is expected to remain volatile.

"However, the market might see some buying interest emerging following a week of consolidation,” he told Bernama. 

Meanwhile, AxiCorp chief global market strategist Stephen Innes said sluggish China retail sales data released on Friday also does not bode well for Malaysia's exporters.

He noted oil prices remained a concern to the market after failing to push out of the current range of around US$45 per barrel.

"The latest Gross Domestic Product (GDP) reading was also a shellshock but fortunately, Malaysia has been more successful in containing the Covid-19 outbreak. 

"This success has been reflected in significantly greater internal mobility and improving retail sales. Hence investors will look through today's GDP to better times ahead," he viewed.

Malaysia’s second quarter GDP data released on Friday showed a contraction of 17.1%, the worst double-digit quarterly decline since 1998.

For the week just ended, the key index FTSE Bursa Malaysia KLCI (FBM KLCI) was traded mostly lower except on Thursday.

The local bourse registered another all-time trading volume high of 27.80 billion shares worth RM7.80 billion on Tuesday, breaking the previous Friday's high of 26.65 billion shares valued at RM9.04 billion.

Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said the local bourse was the biggest loser last week in Asia with a 0.9% drop, dragged down by glove counters namely Top Glove and Hartalega, which declined by 15.4% and 16.3% respectively.

"Notwithstanding this, the FBM KLCI has so far only declined by 1.5% on a year-to-date basis, the smallest drop among its ASEAN peers," he noted.

On a sectoral basis, Bursa Finance index was the largest gainer during the week with a 3.0% jump while the Bursa Healthcare Index dropped 12.5% amid profit-taking activity in glove counters.

On a Friday-to-Friday basis, the index fell 13.55 points to end at 1,564.59 from 1,578.14 on the previous Friday. 

On the scoreboard, the FBM Emas Index fell 221.84 points to 11,144.53, the FBMT 100 Index declined 202.54 points to 10,976.26 and the FBM Emas Shariah Index decreased 582.37 points to 12,915.18.

The FBM 70 dropped 684.62 points to 14,125.85 and the FBM ACE Index tumbled 706.92 points to 9,609.59.

Sector-wise, the Financial Services Index rose 388.96 points to 13,305.05, the Plantation Index improved 37.03 points to 7,000.78 and Technology index edged up 0.72 point to 51.75.

The Healthcare index slipped 164.78 points to 3,762.49 and the Industrial Products and Services Index eased 1.83 points to 139.14. 

Weekly turnover rose to 88.84 billion units worth RM33.46 billion compared with 87.66 billion units worth RM44.56 billion in the previous week.

Main Market volume expanded to 50.66 billion shares valued at RM24.48 billion versus 42.45 billion shares valued at RM29.18 billion a week earlier.

Warrants turnover reduced to 3.08 billion units worth RM1.06 billion from last week’s 4.07 billion units worth RM1.64 billion.

The ACE Market volume decreased to 35.07 billion shares valued at RM7.91 billion compared with 41.11 billion shares valued at RM13.72 billion last week.