KUALA LUMPUR: Bursa Malaysia is set to rise further next week to test the immediate resistance at 1,620 and the next resistance threshold of 1,650.
Phillip Capital Management, Asia-Pacific, senior vice president (investment) Datuk Dr Nazri Khan Adam Khan said the near-term view suggests that the KLCI will continue hovering above the key support level of 1,600.
He said positive overnight Wall Street performance, Bank Negara Malaysia's overnight policy rate (OPR) cut, rising prices of commodities and ease of the US-China trade tension would drive positive sentiment next week.
“Although the ongoing trade tension gave a sour impact to the ringgit versus the greenback, the local market remains attractive with the capital market recording a net inflow of RM2.1 billion,” he said.
Fundamentally, the local market continues to be resilient against the external headwinds with diversified sources of growth.
“Our participation in the ‘Belt and Road Initiative' will give long-term advantage to the economic growth, as an important catalyst for foreign direct investment and connectivity to the global market.
“Looking forward, the lower OPR could be an important factor to boost the local economy in the second half of the year,” he said.
Nazri Khan said OPR cuts and the revival of the East Coast Rail Link and Bandar Malaysia projects would give a breath of fresh air for economic growth.
He said despite the weakness in investment activities, the local market posted a 4.5 per cent growth in the first quarter of 2019.
“This is partly derived by the positive improvement in the agriculture sector and firm private consumption. This gives positive impact to the manufacturing sector, as well as the household spending,”he said.
In line with the encouraging private sector spending, BNM maintained its projection that the Gross Domestic Product (GDP) will continue to grow between 4.3 per cent - 4.8 per cent this year.
He said despite the US-China spat have gave sour impact to the ringgit against the greenback, the local market remained to be attractive, given the RM2.1 billion net inflow recorded in the capital market.
Nazri said the S and P 500's three-day winning streak during the week showed calmness towards the current state of trading relations between Washington and Beijing.
“We believe the US' decision to effectively ban Chinese phone maker Huawei from the US market has overshadowed the earlier move to apply import taxes on European-made cars,” he said.
Overall, Bursa Malaysia was mostly higher despite the mounting concerns over the US-China trade spat.
On a Friday-to-Friday basis, the benchmark FBM KLCI settled 4.91 points weaker at 1,605.36.
The FBM Emas Index declined 74.91 points to 11,300.05, the FBMT 100 Index depreciated 68.25 points to 11,136.80 and the FBM Emas Shariah Index erased 99.09 points to 11,451.34.
The FBM Ace Index fell 137.43 points to 4,395.14 and the FBM 70 shrank 223.73 points to 13,855.32.
Sector-wise, the Financial Services Index dropped 3.31 points to 16,562.87, the Plantation Index eased 154.78 points to 6,895.50, and the Industrial Products and Services Index gave up 2.86 points to 163.82.
Weekly turnover inched down to 11.80 billion units valued at RM9.41 billion from 12.71 billion units valued at RM9.87 billion last Friday.
Main Market volume was weaker at 6.97 billion shares worth RM8.65 billion compared with 8.02 billion shares worth RM8.85 billion.
Warrants turnover slid to 1.67 billion units valued at RM427.70 million from 2.54 billion units valued at RM704.83 million.
The ACE Market volume, however, was higher at 3.22 billion shares worth RM326.88 million from 2.14 billion shares valued at RM301.87 million previously.- Bernama