KLCI to track higher, push toward 1,900 level

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KUALA LUMPUR (April 25): The FBM KLCI is expected to track higher next week in line with the rally at most global markets last week.

Equity markets worldwide climbed to record highs on Friday as solid corporate earnings and an all-time peak for the Nasdaq stock index stoked investor optimism, while the dollar eased on gloomy U.S. economic data, according to Reuters.

Amazon.com Inc, Microsoft Corp and Google Inc led Wall Street higher, pushing the Nasdaq to a second straight record closing high a day after it topped a record that had stood for more than 15 years, it said.

Affin IB vice president and head of retail research Datuk Dr Nazri Khan said Bursa Malaysia should take a higher track next week towards 1,900 level, driven by strong global market sentiment and China mega stimulus, supported by positive momentum from ringgit (week-on-week up 3.1% to 3.5800), brent oil price (w-o-w up 3.6% to USD64.80), Invest Malaysia Conference and the upcoming Malakoff mega initial public offering (IPO), which is tentatively set for May 15.

He said that on the international front, Asian markets put in strong performances, with Nikkei 225 in Tokyo regaining 20,000 level, its highest close since April 2000.

Nazri sasid this was supported by Wall Street S&P 500 equity index which settled at 2,107, 10 points shy of historical record close.

Nazri, who is also president of the Malaysian Association of Technical Analysts, said that on the domestic front, he expects the recently announced tame inflation data and the upcoming Malakoff mega IPO to support the local sentiment.

He said that on the technical front, the FBM KLCI Index had once again eclipsed the 1,860 psychological level for the first time in nearly six month, which had been a monthly hurdle difficult to sustain.

Nazri said the FBM KLCI Index had maintained uptrend and gained a respectable 102 points or 5.8% year-to-date.

“We expect Bursa to accelerate the momentum and test the all-time high of 1896.23 recorded on the July 8 2014.

“All of the major sectoral indices are within striking distance of new multi-year highs with Trading Service sector being the leader hitting a record all time 38 year high,” he said.

Nazri said the market close remained above the 20-day, 50-day and 200-day moving average suggesting firm bullish power across all time frames. 

He said key indicators were suggesting that the uptrend could continue as both Stochatic and RSI indicator are trending north strongly.

“With sign that the Ringgit and crude oil prices could strengthen in the near-term, we reiterate our view that the local bourse is likely to test 1896.23 the all-time-record-high with rising momentum.

“Overall, the FBM KLCI should extend its bullish mode, mirroring Asian bullish market on China mega stimulus,” he said.

Nazri said that strategy wise, aggressive investors should continue to long index futures while conservative investors should accumulate AffinHwang IB’s Top Fifteen stocks namely IHH Healthcare Bhd, MISC BHd, Petronas Dagangan Bhd, Telekom Malsyaia Bhd, Westports Holdings Bhd, Cahya Mata Sarawak Bhd, Globetrinics Technology Bhd, IGB Corporation Bhd, Sunway Bhd, Syarikat Takaful Malaysia Bhd, Matrix Pharmaniaga Holdings Bhd, Concept Holdings Bhd, Tasco Bhd, Berjaya Auto Bhd and MBM Resources Bhd.