KUALA LUMPUR: Analysts expect Bursa Malaysia to remain volatile as investors turn cautious ahead of six state elections.
Six state assemblies will dissolve in June, paving the way for elections within 60 days. So far the Kelantan and Selangor state assemblies have announced that they will do so this week.
The local stock exchange was in red territory in the first half of the day hitting a low of 1,383.86 points before climbing up to a high of 1,388.75 on buying pressure.
The FBM KLCI closed higher 1.00 points or 0.07 per cent at 1,388.33 today by the end of trade.
Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said most investors tend to adopted a 'wait and see' attitude for certain political events to pass before making any investment decision.
Malacca Securities Sdn Bhd head of research Loui Low echoed the same sentiment as Thong, opining that investors may stay on the sidelines ahead of the state elections.
On interest rates cuts by China, Low said the new policy may impact China more positively and later translate into potential buying into the Malaysian market. " However, the market in China needs to move higher first before the buying interest is seen within our markets," he said.
According to a report by Hong Leong Investment Bank (HLIB) prepared by Jeremy Goh the move by the government to slash the stamp duty from 0.15 per cent to 0.10 per cent could possibly rejuvenate retail participation and widen the investor base which may facilitate domestic institutional average daily value (ADV), with a wider range of stock choices for investors as the initial public offering process hastened.
"We see Bursa as the main beneficiary from the said initiatives, however we aren't jumping the gun as yet given that the ADV impact is still fluid," it said. Kenanga Investment Bank Bhd (Kenanga IB) also indicated the new government implementation signals a positive development to the overall trading market.
Despite, the immediate impact that may be subdued due to the softer general sentiment and underperformance thus far.