Uptrend on continued foreign buying

BURSA Malaysia is likely to trend higher this week after recording gains over the past five consecutive weeks amid follow-through foreign buying.

Inter-Pacific Securities Sdn Bhd head of research Pong Teng Siew expected foreign investors to remain as net buyers in the local equity market in the near term of a month or so, and continue to push the key index upwards.

“Therefore, the benchmark FBM KLCI is likely to trade between 1,823 and 1,890 on continuous buying by foreign investors,” he told Bernama.

Pong viewed the foreign inflows as a cycle, especially after international investors dumped nearly RM12bil worth of local equities in early May this year.

“I view this as a transition period as foreign funds have consistently been the net buyers on Bursa Malaysia for the past three weeks,” he said.

Asked how the Pakatan Harapan government’s first 100-day fiscal reforms would influence the local market especially with the Aug 17 deadline approaching, Pong said he did not see any residual impact on the local bourse currently.

“I do not think Pakatan’s 100-day manifesto would drive the local market at the moment, unless political decisions such as the cancellation of certain infrastructure or construction projects are made, just like what had happened previously, only then we can see the impact on related stocks. But that (situation) is over,” he added.

For the week just-ended, Bursa Malaysia was traded mostly higher at between 1,777.78 and 1,812.69, mainly buoyed by continued foreign buying, but was capped by profit-taking on Friday.

The benchmark index breached the 1,800 psychological level to close at an intra-day high of 1,804.73 points on Wednesday with foreign funds snapping up RM229.6mil worth of local stocks, making it the largest WEEKLY FBM KLCI inflow in a day for this month.

On a Friday-to-Friday basis, the benchmark FTSE Bursa Malaysia KLCI was 25.66 points higher at 1,805.75 from 1,708.09 previously. The FBM Emas Index advanced 170.01 points to 12,770.49 and the FBMT100 Index bagged 159.19 points to 12,546.84.

The FBM 70 put on 126.41 points to 15,588.78, the FBM Ace climbed 103.36 points to 5,549.40 and the FBM Emas Shariah Index was up 204.42 points to 12,948.88.

On a sectoral basis, the Finance Index perked up 135.72 points to 17,576.18, the Plantation Index improved 89.44 points to 7,712.83 but the Industrial Index was 6.77 points lower at 3,269.35.

Weekly turnover widened to 11.93 billion units worth RM11.07bil from 11.17 billion units valued at RM10.7bil previously.

Main Market volume rose to 7.52 billion shares worth RM9.99bil compared with 6.65 billion shares valued at RM9.68bil.

Warrants turnover, however, fell to 2.10 billion units worth RM509.46mil against 2.20 billion units valued at RM584.34mil.

The Ace Market volume slipped to 2.29 billion shares worth RM573.79mil versus 2.31 billion shares valued at RM428.57mil. — Bernama Gold futures contract on Bursa Malaysia Derivatives is expected to trade lower this week in tandem with the New York Commodity Exchange’s (Comex) gold market as the US dollar is likely to continue strengthening.

For the week just-ended, gold futures recorded its fifth consecutive weekly fall, tracking the Comex, derailed by the stronger US dollar.

Gold futures were untraded for three of the five trading days on lack of trading inter- KUALA LUMPUR

The ringgit is likely to trend lower against the US dollar this week on continued downward pressure driven by external concerns, an analyst said.

FXTM Global Head of Currency Strategy and Market Research Jameel Ahmad said investors sentiment would likely be influenced by trade war concerns and geopolitical uncertainty.

“All of these factors combined do paint a picture that investors' risk appetite could remain limited for some time,” he told Bernama.

He said if these external factors continued to dominate market attention, the ringgit could weaken to RM4.10 against the greenback in the upcoming weeks as the local unit est due to the stronger greenback.

On a Friday-to-Friday basis, August 2018 eased four ticks to RM159.50 a gramme, September 2018 lost eight ticks to RM159.50 a gramme, while October 2018 and November 2018 fell 10 ticks each to RM159.60 and RM160.40 a gramme respectively.

Weekly turnover fell to three lots valued at RM48,160 from seven lots valued at RM112,100 in the previous week, while open interest improved to 36 contracts from 33 contracts previously. — Bernama remained sensitive to these factors.

For the week just-ended, the ringgit traded rangebound on lack of catalyst amid continuous tension on global trade.

On a Friday-to-Friday basis, the local note depreciated to 4.0830/0870 against the greenback from 4.0800/0850 in the preceding week.

Against other major currencies, the ringgit also decreased against the Singapore dollar to 2.9781/9813 from 2.9770/9813 and fell against the yen to 3.6800/6846 from 3.6523/6574.

The local unit rose against the British pound to 5.2193/2248 from 5.3064/3146 in the previous week and strengthened against the euro to 4.6779/6837 from 4.7222/7292. — Bernama Crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is likely to trend higher this week on positive buying momentum following higher export figures reported by the Malaysian Palm Oil Board (MPOB) yesterday.

The MPOB said palm oil export increased 6.75% to 1.205 million tonnes in July 2018 from 1.129 million tonnes in June.

For the first ten days of August, exports of Malaysian palm oil products rose 7.4% to 298,610 tonnes from 278,048 tonnes shipped during July 1-10, according to an inspection company AmSpec Agri Malaysia.

“The news will likely boost the market, hopefully for this week onwards. KUALA LUMPUR

The Malaysian rubber market is expected to trade higher this week in line with the anticipated better performance on the regional rubber futures markets, a dealer said.

For the week just-ended, rubber prices were traded mostly higher, taking the cue from external factors, including the regional markets performance, as well as the crude oil KUALA LUMPUR

The Kuala Lumpur Tin Market (KLTM) is expected to trade lower this week on weaker demand for the commodity due to intensifying trade tensions between China and the United States.

A dealer said the weakness across the base metals reflected a reduced global risk-taking appetite amid the trade war between the world’s two largest economies.

On a Friday-to-Friday basis, the KLTM price rose US$50 to US$19,650 a

MONEY MARKET

Besides this, we also anticipate the weakening of the ringgit to support the CPO price,” he told Bernama.

The CPO market was traded mostly higher, bolstered by a weaker ringgit and steady crude oil prices.

On a Friday-to-Friday basis, August 2018 increased RM36 to RM2,206 per tonne, September 2018 went up RM47 to RM2,225, October 2018 was RM46 higher at RM2,242, and November 2018 rose RM51 to RM2,275 per tonne.

Weekly turnover jumped to 267,723 lots from 204,191 lots, while open interest increased to 290,355 contracts versus 252,074 contracts. On the physical market, August South was at RM2,220 per tonne, up by RM30 from RM2,190 per tonne. — Bernama

RUBBER

price and ringgit movements.

On a Friday-to-Friday basis, the Malaysian Rubber Board’s noon price for tyre-grade SMR 20 rose 16.5 sen to 545.5 sen a kg, while latex-in-bulk remained at last week's 408.0 sen a kg.

The 5 pm unofficial closing price for SMR 20 gained 11.5 sen to 542 sen a kg, while latex-in-bulk stood at last week's 409.0 sen a kg. — Bernama

TIN

tonne, while turnover for the week decreased to 140 tonnes from 222 tonnes last week.

The tin price on the LME gained US$85 to US$19,690 a tonne.

Throughout the week, buying demand came mainly from China, South Korea, Japan, Taiwan, the United Kingdom and Germany.

The price differential between the KLTM and LME for the week just-ended stood at a discount of US$140 a tonne from a discount of US$5 a tonne last Friday. — Bernama