KUALA LUMPUR (May 7): Bursa Malaysia is expected to trade sideways next week amid cautious market sentiment due to external factors, namely continued worries over aggressive monetary tightening by the US Federal Reserve going forward and a grim economic outlook forecast by the Bank of England (BOE).
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the local bourse would track global equities, which are expected to be volatile in the immediate term amid global monetary tightening.
“This is because central banks globally are upping their arsenal to clamp down on inflationary pressures,” he told Bernama.
At the same time, he said monetary policy divergence such as in China and Japan also suggests a mixed feeling over global growth prospects this year.
“It seems that institutional investors would stay light and remain invested in cash-like instruments. In other words, they are going to stay defensive in the face of uncertainty,” he explained.
All eyes would also be on the latest economic assessment by Bank Negara Malaysia next week, including the gross domestic product (GDP) data for the first quarter of 2022.
“As such, the FBM KLCI is likely to remain in a narrow range of around 1,564 to 1,574 points next week,” he said.
Bursa Malaysia Bhd and its subsidiaries were closed from May 2 till May 4 in conjunction with the Workers’ Day replacement holiday and Hari Raya Aidilfitri holidays.
For the week just ended, the FBM KLCI traded mostly lower amid negative performance in regional markets and a decline on Wall Street as the US 10-year yield surged past the 3% level.
On a weekly basis, the FBM KLCI fell 36.09 points to end the week at 1,564.34 from 1,600.43 in the previous week.
On the index board, the FBMT100 Index fell 264.99 points to 10,855.51, the FBM Emas Shariah Index eased 328.53 points to 11,693.75, the FBM Emas Index slid 260.52 points to 11,205.56, the FBM ACE shed 81.41 points to 5,497.26 and the FBM 70 lost 386.11 points to 13,386.07.
Sector-wise, the Plantation Index lost 287.91 points to 8,533.1, the Industrial Products and Services Index weakened by 5.93 points to 204.1 but the Energy Index added 22.43 points to 796.17.
The Financial Services Index trimmed 250.97 points to 16,675.83, the Healthcare Index shed 38.72 points to 2,011.1, and the Technology Index inched down 3.45 points to 67.88.
Weekly turnover declined to 5.79 billion units valued at RM4.81 billion from 12.9 billion units valued at RM10.72 billion last week.
The Main Market volume eased to 3.53 billion shares worth RM4.41 billion versus 8.49 billion shares worth RM9.71 billion in the previous week.
Warrants volume shrank to 726.98 million units valued at RM130.71 million against 1.76 billion units valued at RM315.6 million previously.
The ACE Market volume was lower at 1.52 billion shares worth RM272.69 million from 2.62 billion shares worth RM686.84 million the week before.