KUALA LUMPUR: Bursa Malaysia is expected to trade higher next week driven by a stronger ringgit, firmer oil price, strong economic growth and better corporate earnings, a dealer said.
Affin Hwang Investment Bank Vice-President/Head of Retail Research, Datuk Dr Nazri Khan Adam Khan, said Malaysia’s fourth quarter gross domestic product growth was forecast at 5.5%, surpassing 4.5% in the same period 2016.
He said the solid economic growth was expected to prompt Bank Negara Malaysia to revise upwards the overnight policy rate in the first quarter of this year.
“Interest rate might go up in the first quarter because our economy is strong,” he told Bernama.
He said global crude oil benchmark, Brent, also hit above US$70 (RM278) per barrel, a level never been seen in three years and thus benefitting about 30% companies in Bursa Malaysia either directly or indirectly with the oil and gas business.
Nazri Khan said another surprise factor of the robustness of the local stock market was the high level of participation from retail traders as well as good foreign funds inflows.
He said the local stock market was not expected to see any impact if the US interest rate was increased by 25 basis points this year.
“Traders have priced in 25-basis point increase in US interest rate. If the increase is more than that, there will be pullout of funds from the local market,” he said.
On a Friday-to-Friday comparison, the FBM KLCI performed better, gaining 4.7 points to end the week at 1,822.67.
The local stock market started the week higher before taking a breather for three consecutive days after two week of rally.
On the scoreboard, the FBM Emas Index rose 57.19 points to 13,222.6, FBMT 100 Index increased 52.98 points to 12,862.66, FBM Emas Syariah Index jumped 96.59 points to 13,707.33, FBM 70 soared 134.55 points to 16,627.16 and the FBM Ace climbed 11.81 points to 6,905.78.
On a sectoral basis, the Finance Index surged 124.63 points to 17,210.91, Plantation Index advanced 133.06 points to 8,137.82 and the Industrial Index gained 7.36 points to 3,399.54.
Total turnover swelled to 27.14 billion units valued at RM19.11 billion from 19.69 billion units valued at RM13.02 billion in the previous week.
Main Market volume to increased to 17.88 billion shares worth RM17.59 billion from the previous Friday’s 12.12 billion shares worth RM11.77 billion.
Warrants turnover rose to 3.46 billion units worth RM479.51 million from 2.99 billion units worth at RM441.37 million previously.
The ACE Market widened to 5.74 billion shares valued at RM1.02 billion against the previous week’s 4.54 billion shares valued RM786.69 million. — Bernama