KL shares to rise towards 1,600 points level next week
Share prices are expected to rise towards the
1,600 points level next week on Bursa Malaysia boosted by strong local and
better than expected global economic data.
The positive sentiment would also be driven by
continuous optimism over Greece’s new agreement on austerity reforms, strong
funds inflow on prospects of added liquidity from major central banks and
rising global equity market.
We believe the long awaited news that Greek
politicians had reached a deal on austerity measures, may pave the way for the
country to receive a second bail out and avoid a disorderly default on its
debt.
In addition, we anticipate the global markets to
be further supported from easy interest rate policy decisions announced by
European central banks and the Bank Of England last week.
The outperformance shown by emerging markets
would also be an added boost to local shares over the near-term.
Going forward, we expect the local market to
extend its gains following the strong bullish breakout last week, boosted by
gains in selected blue chips and strong rotational plays in lower liners.
The ringgit’s rally and the FTSE Bursa Malaysia
Kuala Lumpur Composite Index’s (FBM KLCI) steady gains suggested that the
broader market risk appetite on the local assets had improved.
Any breakout above the 1,565 points mark could
pave the way for further gains towards the all-time FBM KLCI high of 1,597
points level.
For the week just-ended, the local bourse
experienced positive sentiment for the three consecutive trading days.
The highest single-day trading volume, thus far,
since the year began was recorded on Wednesday at 4.39 billion shares, a level
last seen in February 2007
However, slow progress on Greece’s debt talk
influenced sentiment on the local bourse which saw the FBM KLCI gaining on
Wednesday and Thursday on active retail participation in penny stocks and
selected blue-chips.
Profit taking emerged on Friday to trim earlier
gains. On a weekly basis, the FBM KLCI increased 22.89 points to 1,561.66, the
Finance Index surged 272.1 points to 13,859.41 and Industrial Index rose 30
points to 2,901.28. The Plantation Index advanced 140.36 points to 8,878.28,
the FBM Emas Index jumped 149.97 points to 10,883.76, FBM Mid 70 Index perked
85.3 points to 12,491.83 and the FBM ACE Index chalked up 208.96 points to
4,745.59.
Total weekly volume increased to 11.06 billion shares, worth RM9.08
billion, from 9.52 billion shares, worth RM9.2 billion, registered last week.
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