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FBM KLCI to retest 1,700-point level 
Published on: Monday, February 11, 2019

KUALA LUMPUR:  

Trading on Bursa Malaysia is expected to be reinvigorated this week with the market moving in a tight range as most investors flock back from the Chinese New Year celebration, analysts said. 

Bank Islam Chief Economist Dr Mohd Afzanizam Abdul Rashid said the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) had been struggling to pierce its immediate resistance of 1,700 points over the last few weeks.


“External developments continue to take centre stage. Issues surrounding the trade negotiations between the US and China has always been the source of market instability,” he told Bernama. 

If latest news are any indication, the resolution of trade negotiations will still be a long way to go before the US struck a trade deal with China, according to the National Economic Council Director Larry Kudlow.

Additionally, Mohd Afzanizam said the meeting between US President Donald Trump and Chinese President Xi Jinping might not happen before the March 1 trade deadline.

Despite this, Mohd Afzanizam said foreign investors turned net buyers on Feb 4 and 7 snapping up RM138.6 million worth of stocks while the ringgit appreciated to 4.067 against the US dollar at the time of writing.


“Against such backdrop, we could expect the FBM KLCI to continue remaining in a tight range this week,” said Mohd Afzanizam.

Additionally, Malaysia’s 2018 fourth-quarter (Q4 2018) gross domestic product numbers would be announced on February 14.

“Perhaps, investors would also want to assess the resilience of the Malaysian economy.

“This is especially true in the context of weak business and consumer sentiment as indicated by the Malaysian Institute of Economic Research’s survey recently,” the Chief Economist said. The Business Condition Index and Consumer Sentiment Index fell to 95.3 points and 96.8 points in Q4 2018 from 108.8 points and 107.5 points in the previous quarter, respectively.  


Affin Hwang Capital Asset Management Managing Director Teng Chee Wai remained optimistic on the US-China trade negotiations as the backdrop of the global economy was actually very strong, while the vision of a downtrend in local corporate earnings is still an ongoing process. 

“Putting the two together, this year will probably be a better year than last year from the equity market standpoint,” said Teng. – Bernama

 

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