Malaysian shares higher on Budget 2016 anticipation

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KUALA LUMPUR (Oct 16): The FBM KLCI ended 3.57 points or 0.21% higher, as investors anticipated the Budget 2016 announcement next Friday.

Today, fund managers said Malaysian shares rose on foreign institutional buying, amid Asian equity gains. Reuters reported that Asian shares held near a two-month high on Friday, catching some of Wall Street's shine after upbeat US price and jobless claims data eased some concerns about the strength of the US economy.

In Malaysia, the KLCI closed at 1,716.82 points. Across Asia, Japan's Nikkei 225 rose 1.08%, while Hong Kong Hang Seng's added 0.78%.

In Malaysia, Areca Capital Sdn Bhd's chief executive officer Danny Wong expects the KLCI to trade higher next week, in anticipation of the budget announcement.

"Although there will be some volatility caused by the external factors, such as the overnight US stock market, the key index should continue to trade upward," he said.

Today, the weaker ringgit was also seen playing a role in attracting foreign funds into Malaysian assets. The ringgit depreciated to 4.1785 against the US dollar at 4:59pm today.

It was reported that the US dollar strengthened against major currencies, including the ringgit today, on better-than-expected US inflation data and growing expectation of more euro zone easing.

Wong noted the weaker ringgit had boosted the competitiveness of Malaysian electrical & electronic exports.

In view of this, he said some foreign funds had been coming back to the country. "We saw some net buying from foreign institutional funds this week, while local institutional funds are net sellers," he said.

Today, Bursa Malaysia saw 487 advancers versus 345 decliners, while 339 counters were unchanged. A total of 2.58 billion shares, valued at RM2.23 billion, changed hands.

Top gainers included Sam Engineering & Equipment (M) Bhd and Top Glove Corp Bhd.

The top decliner was Nestle (M) Bhd, while the most actively-traded stock was MQ Technology Bhd.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)