Investors take cautious stance on Bursa ahead of Budget 2023

KUALA LUMPUR: Investor sentiment remained cautious on Bursa Malaysia ahead of the Budget 2023 presentation on Friday, as external headwinds continue to drive volatile global markets lower on risk-off trades.

The local benchmark FBM KLCI recovered from early losses to rise 2.99 points to close at 1,397 yesterday after hitting a high of 1,401 and low of 1,384 in intraday trade, although market breadth continues to stay firmly negative.

Losers outnumbered gainers 530 to 285 while 383 counters remained unchanged.

Regional markets were broadly negative while the ringgit continued to weaken against the US dollar to close at RM4.6460.

Rakuten Trade head of equity sales Vincent Lau said there may be a possibility for the market to experience a technical rebound from 30-month lows.

“This could be a technical rebound for the FBM KLCI as everything seems to be oversold. It could be attempting to recover to be above the 1,400-point mark,” Lau told StarBiz.

Lau said the ongoing risks to the market included the Federal Reserve’s unchanged aggressive stance towards inflation that may continue to put risk sentiment at bay.

“Inflation numbers may soon improve in the United States. The US markets have been going down for the past nine months. The bottom may not be far from here and there are some pockets of strength in the market,” Lau said.

TA Research in its report said the FBM KLCI sank 117.42 points, or 7.8%, in September with the loss contributed by index-linked counters such as Public Bank Bhd, Press Metal Aluminium Holdings Bhd, Tenaga Nasional Bhd, Axiata Group Bhd, Dialog Group Bhd, Sime Darby Plantations Bhd and IOI Corp Bhd.

For 2022 in the year-to-date period, the FBM KLCI tumbled 172.9 points, or 11%.

Average daily traded volume and value for the month was at 2.29 billion shares worth RM1.76bil, respectively, compared to the 2.43 billion shares worth RM1.74bil average in July, it said.

TA Research said historical trends for the month of October showed the FBM KLCI rising in 23 of the past 32 years, returning an average of 1.73%.

“For November, 13 of the past 32 years were gainers but average returns were mildly negative. December enjoyed the best average gain of 3.78%, with the index overwhelmingly rising in 28 of the past 32 years.

“The strong December performance is warranted given the robust upside momentum, driven by year-end window-dressing,” it said.

Meanwhile, MIDF Research said Bursa Malaysia continued to experience foreign net selling for the fourth consecutive week last week.

“They have net sold RM740.6mil worth of equities last week, which was higher than the RM562.6mil sold in the previous week.

“To date, international investors have been net buyers for 24 out of the 39 weeks of 2022, with a total net inflow of RM6.62bil,” it said.

It said local institutions were net sellers for 30 out of 39 weeks, with a total net outflows of RM8.89bil, while local retailers have been net buyers for 26 out of 39 weeks of 2022, with net buying of some RM2.27bil.

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