BURSA Malaysia can stage a minor technical rebound this week after being dampened by plunging oil prices in the past few weeks.
Affin Hwang Capital vice-
president and head of retail research Datuk Dr Nazri Khan said the stock market experienced heavy selldown in oil and gas counters last week because of a dip in crude oil prices.
“Bursa Ma-laysia may rebound this week as the stock market was oversold due to the plunging oil prices last week. I expect the market to correct itself and this would be a good time for bargain-hunting of oil and gas stocks,” Nazri told Business Times in a phone interview.
Crude oil prices declined to its lowest in five years, sending oil and gas-linked stocks lower, after Opec decided not to trim oil production output despite a glut in supply and the United States taking a step back in imports but carrying on with exports.
Last Friday, share prices on Bursa Malaysia rebounded to close 3.68 points higher to 1,749.37 after being in the red for four consecutive days, because of poor oil prices. However, it was still lower than the previous week’s 1,820.89-point closing.
“There is no reason for oil prices to weaken as the economies of China, Brazil and India are growing strongly and they have big demand for oil. So I blame Opec for plunging oil prices,” he said.
Nazri is recommending stocks like AirAsia, OldTown Bhd and Nestle as he expects them to hold strong because of the current school holidays, upcoming Christmas and New Year celebrations.