Bursa to consolidate to 1,500-1,530 next week on prolonged bargain-hunting

KUALA LUMPUR (Sept 12): Bursa Malaysia is expected to continue its consolidation mode with an upward bias next week on prolonged bargain-hunting in glove counters.

Rakuten Trade Sdn Bhd research vice-president Vincent Low said given that the glove counters, particularly Top Glove and Hartalega, had been oversold over the past week due to heavy profit-taking, bargain-hunting was likely to continue next week.

“That will likely to bring the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) to trend between 1,500-1,530 next week,” he told Bernama.

Asked if Bursa Malaysia had finished its bull-run since it hit the 10-year low of 1,219.72 on March 19, Low dismissed some analysts’ concerns and reiterated that the current trend was a healthy correction to stabilise the market moving forward.

“Previously, we saw the market was overbought with overwhelming trading volume which touched an all-time high of 27.8 billion on Aug 11, 2020. Therefore, the current correction is necessary to ‘cool down’ the market,” he said, adding that the trading volume could surpass Aug 11’s peak due to the strong liquidity in the Malaysian market.

According to Low, the consolidation mode is likely to extend till next month, as at present, investor sentiment is still clouded by the Sabah state election that will take place on Sept 26, as well as FTSE Russell’s decision later this month on whether to maintain Malaysia in its World Government Bond Index (WGBI).

Over the past week, the FBM KLCI was traded sideways on prolonged profit-taking in glove counters and caused the index to fall below the 1,500 psychological level on Wednesday and Thursday.

However, bargain-hunting emerged on Friday and lifted the market barometer to 1,504.85.

Meanwhile, the announcement of the unchanged Overnight Policy Rate of 1.75% on Thursday did not have much impact on the banking stocks as the move was in line with market expectations.

On a Friday-to-Friday basis, the FBM KLCI ended 11.01 points easier at 1,504.85 compared with 1,515.86 previously.

On the scoreboard, the FBM Emas Index declined 220.82 points to 10,751.48, the FBMT 100 Index shed 197.0 points to 10,573.54 and the FBM Emas Shariah Index went down 367.28 points to 12,642.54.

The FBM 70 dipped 725.79 points to 13,672.39 and the FBM ACE Index slid 60.18 points to 10,745.87.

Sector-wise, the Financial Services Index gained 4.91 points to 12,665.45, but the Plantation Index erased 55.37 points to 7,007.88 and the Technology Index trimmed 3.15 points to 54.11.

The Healthcare Index contracted 424.09 points to 3,432.92 and the Industrial Products and Services Index eased 1.59 points to 135.34.

Weekly turnover narrowed to 32.89 billion units valued at RM24.87 billion from 38.44 billion units valued at RM20.48 billion last week.

Main Market volume improved to 22.74 billion shares worth RM19.94 billion compared with 21.27 billion shares worth RM16.04 billion in the previous week.

Warrants turnover widened to 4.04 billion units worth RM1.03 billion against 2.26 billion units valued at RM674.15 million.

The ACE Market volume shrank to 12.99 billion shares valued at RM3.88 billion versus 14.88 billion shares worth RM3.76 billion previously.–The Edge

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