Firmer trade on better-than-expected growth

BURSA Malaysia is expected to trade firmer this week, boosted by an increase in investor confidence following the better-than-expected gross domestic product (GDP) data for the country released on Thursday.

Affin Hwang Investment Bank vice-president/head of retail research Datuk Nazri Khan Adam Khan said the benchmark FBM KLCI would remain buoyant and touch 1,730.

“The FBM KLCI has been breaching the 1,700-point psychological barrier since Monday. Along with the better economic data, it shows that confidence among investors is improving and this will lift buying momentum,” he told Bernama.

Bank Negara announced that Malaysia's GDP grew by 4.5% in the fourth quarter of 2016 (4Q16), underpinned by continued expansion in private sector expenditure, leading to a full year growth of 4.2%.

Nazri noted that the local stock market would also be influenced by the ringgit and commodity prices – that of crude palm oil and crude oil.

“If the commodity prices can recover further, it will definitely lend support to the local bourse,” he said, adding that the ringgit had started to stabilise at 4.45 against the US dollar recently.

Apart from that, he said the US Federal Reserve’s (Fed) decision on interest rates would also affect the benchmark index.

“Nevertheless, judging from the statement by Fed chair Janet Yellen during her testimony before Congress recently, there seems to be no rush to increase interest rates,” he added.

For the week just ended, the local market saw range-bound trading, helped by trading in heavyweights led-by energy stocks, trade and services and industrial stocks, as well as the better-than-expected GDP data.

On a week-to-week basis, the FBM KLCI gained 8.74 points to 1,707.68 from 1,698.94 last Friday. The FBM Emas Index surged 57.74 points to 12,021.17, the FBMT 100 Index rose 55.78 points to 11,699.35 and the FBM Emas Shariah Index increased 34.46 points to 12,524.86.

On a sectoral basis, the Finance Index surged 76.28 points to 15,067.0 and the Industrial Index advanced 40.44 points to 3,277.91 while, Plantation Index dropped 68.87 points to 8,146.42.

Weekly turnover expanded to 11.34 billion units worth RM 12.19bil from 9.74 billion units worth RM9.27bil.

Main Market volume widened to 8.22 billion shares valued at RM11.62bil from 6.99 billion shares valued at RM6.76bil.

Warrant turnover rose to 872.14 million units worth RM113.42mil from 867.57 million units worth RM120.69mil.

The Ace Market increased to 2.16 billion shares worth RM450.25mil from 1.84 billion shares worth RM377.56mil. – Bernama