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Caution seen on Bursa next week ahead of US interest rate decision

Publish date: Sat, 10 Jun 2023, 10:33 AM

KUALA LUMPUR (June 10): Bursa Malaysia is expected to see cautious trading next week ahead of an interest rate decision in the US on Wednesday (June 14). 

SPI Asset Management managing director Stephen Innes said local investors would also watch out for China's stimulus measures to help restore investor confidence. 

"Despite the soggy outlook for China, I think Asean and South Asia have better long-term prospects for earnings direction. Malaysia is the preferred exposure, given lower starting valuations in our part of the Asia-Pacific. 

"I could see Malaysia stealing some of Japan's inflow thunder, as the US and Western supply chains orient away from China to other Asean supplies. I also think Malaysia stands out, and once we get some clarity on the US Federal Reserve policy and the ringgit turns a bit stronger, we should expect more inflows," he told Bernama. 

Given the local bourse’s performance on Friday, Innes said the FBM KLCI could test the 1,385 level next week.

Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng also sees cautious trading next week, although bargain-hunting may emerge. 

"We reckon the local market is oversold, hence providing opportunities for investors to accumulate stocks at attractive levels given their cheaper valuations. We see the KLCI remaining in consolidation mode next week, and trend between 1,375 and 1,390 points," he said. 

On a Friday-on-Friday basis, the KLCI declined 5.18 points to end the week at 1,376.08, from last week’s 1,381.26.

On the index board, the FBM Emas Index decreased 55.19 points to 10,151.98, the FBMT 100 Index slid 58.58 points to 9,849.87, and the FBM Emas Shariah Index eased 108.80 points to 10,482.06.

The FBM 70 Index went down 168.81 points to 13,435.83, and the FBM ACE Index eased 19.43 points to 5,050.83.

Sector-wise, the Financial Services Index improved 46.01 points to 15,139.96 and the Plantation Index rose 62.08 points to 6,686.64. The Industrial Products and Services Index eased 1.87 points to 157.91, and the Energy Index was 19.98 points lower at 791.30.

For the shortened week just ended, weekly turnover declined to 12.70 billion units valued at RM6.75 billion, versus 15.20 billion units valued at RM12.90 billion last Friday.

The Main Market volume weakened to 8.20 billion shares worth RM5.71 billion, compared with 10.20 billion shares worth RM11.50 billion in the previous week.

Warrant turnover was slightly higher at 1.44 billion units valued at RM203.22 million, from 1.42 billion units valued at RM188.45 million a week ago.

The ACE Market volume dropped to 3.06 billion shares worth RM831.53 million, from 3.57 billion shares worth RM1.21 billion last week.

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