KLCI expected to trend higher in coming week

TheEdge Sat, Nov 11, 2023 10:42am - 6 months View Original

KUALA LUMPUR (Nov 11): The FBM KLCI is expected to trend higher towards the 1,460-point level next week, driven by Wall Street’s record best week in a year after US jobs growth slowed.

Inter-Pacific Asset Management Bhd chief economist and fund manager Datuk Dr Nazri Khan said although the key index continued to lose ground to below 1,450, it was still able to hold on to its recent gains above the 1,440 level at the end of this week's trade.

The losses were slight and temporary, largely in tune with the weakness in regional indices after an overbought global weekly gain, he added.

He said the latest positive local economic headlines are likely to drive the upside forward.

He noted that Malaysia’s wholesale and retail trade recorded a sales value of RM142.7 billion, an increase of 6.5% year-on-year (y-o-y) in September 2023, and Malaysia’s service sector revenue grew 7.6% y-o-y to RM584.0 billion in the third quarter of 2023.

The growth was spurred by favourable performance across all segments of the service sector, with the largest contribution coming from the wholesale and retail trade, food and beverages, and accommodation segment, which underlies solid local economic fundamentals.

Despite the temporary pullback, Nazri Khan believes that the market undertone is still holding steady, helped by the easing interest rate and inflationary pressures worldwide that are also permeating local equities as well.

“Even so, there appears to be some follow-through buying interest in key finance heavyweights to provide a further lift to the key index in the near future.

“As it is, market players are still awaiting more leads from the ongoing results reporting season for more inklings into the corporate earnings prospects for 2024 before making further moves, with the 1,460 level as the immediate target,” he told Bernama.

In the meantime, he said the lower liners and broader market shares could also make further headway amid the more positive market undertone.

However, the gains may remain relatively benign, as buying interest is still moderate.

Technically, he said the immediate hurdle is at the 1,480 level, followed by the 1,500 psychological level.

On Friday, Malaysian stocks ended the week on a softer note, in line with regional bourses, mirroring the global market downturn, as US Federal Reserve chairman Jerome Powell expressed doubts about US interest rates’ effectiveness in curbing inflation. 

On a Friday-on-Friday basis, the KLCI fell 4.75 points to end the week at 1,445.18, versus 1,449.93 a week earlier.

On the index board, the FBM Emas Index slipped 7.47 points to 10,691.47, the FBMT 100 Index was 14.82 points weaker at 10,353.59, the FBM Emas Shariah Index went down 9.62 points to 10,897.17, while the FBM 70 Index jumped 63.40 points to 14,161.93, and the FBM ACE Index increased 33.66 points to 5,132.65.

Sector-wise, the Financial Services Index decreased by 2.81 points to 16,296.07, the Plantation Index dipped 30.96 points to 6,922.29, and the Energy Index lost 4.70 points to 859.34, while the Industrial Products and Services Index rose 0.69 of a point to 172.4.

Weekly turnover increased to 17.0 billion units valued at RM10.04 billion, versus 15.58 billion units valued at RM9.12 billion in the preceding week.

The Main Market volume swelled to 11.29 billion shares worth RM8.78 billion, against 9.26 billion shares worth RM7.73 billion in the previous week.

Warrant turnover declined to 1.90 billion units valued at RM264.22 million, from 2.07 billion units valued at RM315.87 million last week.

The ACE Market volume declined to 3.73 billion shares worth RM984.0 million, from 4.20 billion shares worth RM1.07 billion previously.

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