KUALA LUMPUR: Bursa Malaysia's key index is anticipated to trade within the 1,640 to 1,670 range next week, with the overall trend remaining positive due to a favourable economic outlook, robust corporate earnings, a strengthening ringgit, and growing foreign interest.
UOB Kay Hian Wealth Advisors head of investment research Mohd Sedek Jantan said that recent macroeconomic indicators (from the United States) suggest a potential upward trajectory for the FTSE Bursa Malaysia KLCI (FBM KLCI).
"Market expectations for a 25-basis point reduction in interest rates at the US Federal Reserve's (Fed) September meeting have been strengthened by a series of data releases pointing towards a shift in monetary policy.
"Notably, weekly jobless claims, flash Purchasing Managers' Index, and July's inflation figures have all come in below consensus estimates, providing compelling evidence for a more accommodative stance from the Fed.
"As investors begin to factor in the likelihood of a rate cut, the returns on traditional savings and fixed-income investments, such as bonds, tend to diminish," he told Bernama.
Consequently, Mohd Sedek said that investors in search of higher yields are likely to turn towards the Asia-Pacific region, with Malaysia particularly poised to benefit from increased foreign inflows into both its capital and debt markets.
"This pattern was already evident last week (since 13th August till now), and we expect this trend to continue.
"Considering the favourable economic outlook, robust earnings, a strengthening Malaysian ringgit, and growing foreign interest, we believe that stocks related to the investment themes of data centres, the Johor-Singapore Special Economic Zone, and the financial sector should come into focus as key opportunities, especially in anticipation of the Fed's rate cuts," he added.
Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said the FBM KLCI is expected to trade within a narrow range next week.
"From a technical perspective, the benchmark index has extended its rally, breaking above the 1,637 mark for the first time in three years on Monday. However, profit-taking soon set in following the recent surge.
"We anticipate volatile trading ahead, with consolidation likely to persist due to a lack of fresh catalysts," he said.
On a Friday-to-Friday basis, the FBM KLCI increased by 11.84 points to 1,635.74 from last week's 1,623.90.
On Aug 19, Bursa Malaysia hit a 44-month high but later retraced on profit-taking in key sectors and negative Wall Street cues. It rebounded briefly on optimism from earnings reports but ended the week lower amid cautious trading ahead of the Fed's address at the Jackson Hole Symposium.
On Bursa Malaysia's index board, the FBM Emas Index fell by 1.32 points to 12,333.81, the FBM Emas Shariah Index decreased by 139.99 points to 12,262.05, the FBM 70 Index declined by 129.22 points to 17,714.43, and the FBM ACE Index dropped by 183.29 points to 5,215.69.
Meanwhile, the FBMT 100 Index increased by 37.35 points to 12,013.44.
Sector-wise, the Financial Services Index surged by 600.93 points to 19,020.65, the Plantation Index rose by 16.17 points to 7,200.17, while the Industrial Products and Services Index retreated by 2.19 points to 181.60 and the Energy Index decreased by 30.57 points to 921.53.
For the week just ended, turnover expanded to 18.63 billion units valued at RM17.64 billion versus 17.67 billion units valued at RM13.44 billion in the preceding week.
The Main Market volume advanced to 10.21 billion shares worth RM16.06 billion against 9.89 billion shares worth RM11.85 billion a week ago.
Warrants turnover improved to 5.63 billion units valued at RM650.47 million from 5.21 billion units valued at RM680.11 million last week.
The ACE Market volume increased to 2.76 billion shares worth RM932.47 million from 2.55 billion shares worth RM907.09 billion previously.
-- BERNAMA
TAGS: Bursa Malaysia, FBM KLCI, Weekly, UOB Kay Hian, Rakuten Trade