KUALA LUMPUR (Oct 25): The FBM KLCI closed slightly lower on Monday as investors are awaiting the Budget 2022 announcement on Friday (Oct 29).
The benchmark index closed 0.14 points lower at 1,587.94 despite reaching an intraday high of 1,593.37 and dipping to a low of 1,586.77.
Market breadth was negative with 567 losers outnumbering 455 gainers, while 441 counters were unchanged.
Trading volume remained low at 3.88 billion shares worth RM2.46 billion.
“All eyes are on the Budget 2022 announcement this week. We expect (Bursa Malaysia) to trade sideways in a tight range, the ongoing global market developments such as global supply chain bottleneck, spike in energy commodities prices and the Evergrande default are well contained and mostly priced in. It is unlikely to have any wild swings unless a black swan event happens,” said HLIB Research head of retail research Ng Jun Sheng said.
“Market consensus is that the budget will be moderately expansionary and likely to focus on being 'rakyat-friendly', spurring economic recovery and growth, pushing for reforms. The recent highs in crude oil and CPO prices will likely contribute to the government budget especially from Petronas and major plantation players,” he added.
Besides that, Ng commented that the consensus view is that there should not be any surprises in new taxes like the capital gains tax that was mooted before. However, he noted that the government might raise sin tax on breweries and tobacco companies but they will have to balance it with the possibility of increased illicit trade for those products.
Ng also said global developments, such as the inflation, the timing and quantum of bond tapering in the US as well as the OPEC meeting scheduled in November are events to look out for in the near term despite the domestic market’s focus on the Budget 2022 announcement this week.
On the technical reading, Ng said the weekly resistance for the benchmark index is at 1,600-1,650 points while the weekly support is around 1,567-1,573.
The top value gainers on Monday were Chin Hin Group Bhd, Hong Leong Capital Bhd, and Petronas Dagangan Bhd, while the top value losers were Malaysian Pacific Industries Bhd, Nestle Malaysia Bhd, and PMB Technology Bhd. Dagang NeXchange Bhd was the most actively traded stock with 156.3 million shares traded.
Elsewhere in the region, Singapore’s Straits Times Index declined 0.11%, Hong Kong’s Hang Seng Index gained 0.02%, Japan’s Nikkei 225 declined 0.71%.