Bursa Malaysia likely to trade in cautious mode with upside bias this week

KUALA LUMPUR, Aug 1 (Bernama): Bursa Malaysia is expected to trade in cautious mode with an upside bias, with the benchmark index hovering within a range of between 1,500 and 1,520 points this week, a dealer said.

Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said investors are expected to remain cautious amid heightened uncertainties surrounding the political scene as well as the high number of daily Covid-19 positive cases and concern over its impact to the economy.

"Although the daily vaccination doses administered reached a record high of 556,404 doses on Thursday, investors are still concerned with the number of cases which remained high at above 15,000 cases per day,” he said.

He said the number of Covid-19 patients in the Intensive care units (ICU) also remained worrying at 1,043 patients as at July 29.

"However, we expect to see some bargain-hunting activities as the market is oversold, closing below the 1,500 level on Friday.

"Also as the latest corporate earnings season has started, any positive surprises could push the market higher,” he told Bernama.

On the economic data front, Adam noted there would be a slew of manufacturing Purchasing Managers' Index (PMI) data for the month of July in the pipeline for countries including Malaysia, China, Taiwan, Vietnam, Thailand and the Philippines which investor would monitor for clues on market direction.

"We opined that the manufacturing PMI for Malaysia could remain below 50 points due to the enhanced movement control order imposed in certain parts of Selangor and Kuala Lumpur during the first half of July which saw certain industries such as rubber gloves not being able to operate,” he added.

For the week just ended, Bursa Malaysia was traded in a volatile mode, starting the week lower, but recouped its losses on Tuesday and Wednesday before it succumbed to selling pressure on Thursday and Friday to end the week breaching the 1,500 support level amid heightened political uncertainties.

The resurgence of Covid-19 cases globally also remained a key concern among market players as it could hamper the economic recovery.

Overall, for Bursa Malaysia, the FBM KLCI decreased 28.84 points to end the week at 1,494.60 from 1,523.44 a week earlier.

On the index board, the FBM Emas Index was 204.66 points lower at 10,973.47, the FBMT 100 Index declined 191.37 points to 10,681.25, and the FBM Emas Shariah Index fell 276.08 points to 12,049.08.

The FBM Ace tumbled 342.60 points to 7.080.63, and the FBM 70 slipped 203.02 points to 14,518.29.

Sector-wise, the Industrial Products and Services Index shed 2.67 points to 187.20, the Plantation Index shrank 204.5 points to 6,039.04 and the Financial Services Index gave up 163.48 points to 14,681.45.

The Energy Index trimmed 25.48 points to 739.40, the Healthcare Index narrowed 98.65 points to 2,818.0 and the Technology Index eased 1.17 points to 88.35.

Weekly turnover increased to 21.44 billion units valued at RM13.2 billion from 20.89 billion units valued at RM13.06 billion in the previous week.

Main Market volume widened to 11.87 billion shares worth RM10.28 billion against last week’s 11.57 billion shares worth RM10.17 billion.

Warrants volume went up to 1.79 billion units valued at RM248.16 million from 1.33 billion units valued at RM139.50 million previously.

The Ace Market volume reduced to 7.78 billion shares worth RM2.66 billion from 7.99 billion shares worth RM2.74 billion last week. - Bernama

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