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KUALA LUMPUR (Sep 12): Bursa Malaysia is expected to continue its consolidation mode with a bullish bias next week in the prolonged bargain hunt at glove counters.
Vincent Low, research vice president at Rakuten Trade Sdn Bhd, said that since the glove counters, particularly Top Glove and Hartalega, had been oversold over the past week due to large profit taking, bargain hunting is likely continue next week.
“That will probably make the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) trend between 1,500 and 1,530 next week,” he told Bernama.
When asked if Bursa Malaysia had ended its bull run since hitting the 10-year low of 1,219.72 on March 19, Low dismissed the concerns of some analysts, reiterating that the current trend was a healthy correction to stabilize the market in the future.
“Previously, we saw that the market was overbought with an overwhelming trading volume hitting an all-time high of 27.8 billion on August 11, 2020. Therefore, the current correction is necessary to ‘cool down’ the market,” he said, and added that trading volume could exceed the August 11 peak due to strong liquidity in the Malaysian market.
According to Low, the consolidation mode is likely to extend into next month, as at present, investor sentiment is still clouded by the Sabah state elections to be held on September 26, as well as by FTSE Russell’s decision later this month on whether to keep Malaysia on its World Government Bond Index (WGBI).
Over the past week, the FBM KLCI traded sideways in prolonged profit-taking on the glove counters and caused the index to fall below the 1,500 psychological level on Wednesday and Thursday.
However, the bargain hunt emerged on Friday and raised the market barometer to 1,504.85.
Meanwhile, the announcement of the unchanged overnight policy rate of 1.75% on Thursday didn’t have much of an impact on bank stocks, as the move was in line with market expectations.
From Friday to Friday, the FBM KLCI closed 11.01 points easier at 1,504.85 compared to 1,515.86 previously.
On the scoreboard, the FBM Emas index fell 220.82 points to 10,751.48, the FBMT 100 index fell 197.0 points to 10,573.54 and the FBM Emas Shariah index fell 367.28 points to 12,642.54.
The FBM 70 fell 725.79 points to 13,672.39 and the FBM ACE index fell 60.18 points to 10,745.87.
By sector, the Financial Services Index gained 4.91 points to 12,665.45, but the Plantations Index erased 55.37 points to 7,007.88 and the Technology Index cut 3.15 points to 54.11.
The sanitary index fell 424.09 points to 3,432.92 and the industrial products and services index dropped 1.59 points to 135.34.
Weekly turnover dropped to 32.89 billion units valued at RM24.87 billion from 38.44 billion units valued at RM20.48 billion last week.
The main market volume improved to 22.74 billion shares worth RM19.94 billion compared to 21.27 billion shares worth RM16.04 billion in the previous week.
Warrant turnover increased to 4.04 billion units worth RM1.03 billion compared to 2.26 billion units valued at RM674.15 million.
ACE’s market volume declined to 12.99 billion shares worth RM3.88 billion from 14.88 billion shares worth RM3.76 billion previously.
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