Kuala lumpur: Bursa Malaysia's benchmark index is anticipated to tread cautiously next week, influenced by several global economic factors such as the Federal Reserve's recent policy decision, ongoing developments in West Asia, fluctuating oil prices, and evolving US interest rate expectations.
According to BERNAMA News Agency, Mohd Sedek Jantan, director of investment strategy and country economist at IPPFA Sdn Bhd, noted that rising oil prices and geopolitical instability could maintain high inflation expectations. Moreover, changes in US interest rate forecasts may continue to impact global bond yields, the US dollar, and emerging-market flows. Amidst these conditions, investor strategies on Bursa Malaysia are expected to remain relatively defensive, with a focus on sectors that offer resilient earnings and domestic or commodity-linked exposure. Jantan suggested that the market's defensive nature might offer some protection from the downturn in technology-heavy regional indices, especially if higher oil prices persist in affecting global risk appetite.
Meanwhile, Thong Pak Leng, vice-president of equity research at Rakuten Trade Sdn Bhd, indicated that the benchmark index is likely to remain in consolidation in the coming week. He mentioned the possibility of a technical rebound if oil prices and US Treasury yields continue to decrease. Thong pointed out that the recent sharp correction has made valuations more appealing, potentially encouraging local institutions and bargain hunters to gradually rebuild positions in selected blue-chip stocks. However, he warned that continuous foreign selling, a robust US dollar, and prospects of further US monetary tightening could limit upward movement. Thong anticipates the benchmark index to trade within the 1,650-1,680 range, with a sustained move above 1,675-1,680 required to regain stronger upward momentum.
For the week ended yesterday, US interest rates were increased for the first time in over three years, reaching 3.75 to 4 percent, up from 3.5 to 3.75 percent. Additionally, the Bank of Japan raised its policy rate to 1.25 percent on Friday, marking its highest level in 31 years. Brent crude oil, which settled at US$105.68 a barrel on Monday, dropped 1.93 percent to US$102.80 as of 6.50 pm Friday.
On a Friday-to-Friday basis, the FTSE Bursa Malaysia KLCI (FBM KLCI) decreased by 21.18 points to close at 1,665.56, down from 1,686.74 the previous week. The FBM Emas Index fell 98.48 points to 12,411.72, the FBM Top 100 Index lost 95.27 points to 12,211.37, the FBM Emas Shariah Index shed 84.82 points to 12,311.99, and the FBM ACE Index slipped 15.63 points to 5,244.60. However, the FBM Mid 70 Index saw a gain of 115.38 points, ending at 17,844.02.
In terms of sectors, the Energy Index advanced by 6.19 points to 820.62, and the Plantation Index rose by 60.42 points to 9,496.44. Conversely, the Industrial Products and Services Index fell 3.54 points to 185.24, while the Financial Services Index declined by 209.58 points to 19,412.63.
Weekly turnover decreased to 15.02 billion units valued at RM14.18 billion, compared to 18.97 billion units worth RM15.53 billion in the previous week. Main Market volume reduced to 9.38 billion units valued at RM12.93 billion, from 11.62 billion units valued at RM13.89 billion previously. Warrants turnover narrowed to 3.61 billion units worth RM498.33 million, from 4.40 billion units worth RM624.83 million the previous week. ACE Market volume fell to 2.02 billion units valued at RM748.59 million, compared with 2.93 billion units valued at RM1.00 billion the prior week.