Cautious trading seen this week

Bursa Malaysia is likely to trade cautiously this week with domestic and external factors continuing to dictate the market, said analysts.

Inter-Pacific Securities Sdn Bhd head of research Pong Teng Siew said the market would be dependent on how the US market performed at its close on Friday.

Pong noted that Budget 2019 had been viewed with anticipation in the market.

“There was talk about more taxes to clear the government’s debts. This is introducing a bit of uncertainty in the market as to whether the market thinks these taxes are going to be painful enough or there will be only a small increase in taxes.

“But most investors are waiting to see how much of an increase in revenue raising the government is going to engage in,” he added.

Meanwhile, OANDA head of trading in Asia Pacific Stephen Innes said the US Treasury Department would release its currency report today, with some rumours saying they would not classify China as a currency manipulator.

“This could avert an emerging Asia currency meltdown and would forestall an escalation of the US-China trade war. We will have a much more positive tone provided there is no currency manipulation noise from President Trump,” he added.

Innes said Budget 2019 headlines would intensify ahead of its announcement on Nov 2, and this could keep investors nervous.

In the week just ended, Bursa Malaysia underwent a volatile week, starting on a weak note on Monday on the back of rising US government bond yields and a weak Chinese market after its Golden Week.

Further weaknesses shrouded the market on Wednesday in line with Wall Street's declining performance on fears of rising interest rates. The local market recovered on Friday on bargain-hunting activities.

On a Friday-to-Friday basis, the bench- WEEKLY FBM KLCI mark FBM KLCI settled 46.41 points weaker at 1,730.74.

The FBM Emas Index lost 425.77 points to 11,981.86, the FBMT100 Index fell 405.01 points to 11,809.62 and the FBM Emas Shariah Index depreciated 522.86 points to 11,988.96.

The FBM 70 contracted 819.03 points to 13,860.09, while the FBM Ace gave up 222.04 points to 5,008.02.

On a sectoral basis, the Finance Index eased 183.5 points to 17,528.62, the Plantation Index was 70.63 points easier at 7,411.80, and the Industrial Products and Services Index eased 5.4 points to 171.6.

Weekly turnover increased to 10.15 billion units valued at RM10.68bil against 9.2 billion units worth RM9.18bil. Main Market volume was slightly higher at 6.71 billion shares worth RM10.03bil versus 6.33 billion shares worth RM8.49bil last Friday.

Warrants turnover appreciated to 1.90 billion units worth RM357.70mil from 1.64 billion units valued at RM392.29mil.

The Ace Market volume gained to 1.57 billion shares valued at RM289.37mil compared to 1.54 billion shares worth RM297.83mil. — Bernama KUALA LUMPUR

Gold futures contracts on Bursa Malaysia Derivatives are likely to trade lower this week on weak sentiment for the precious metal, said a dealer.

Phillip Futures Sdn Bhd Dealer Leo Goh Boon Hao said the market is expected to be lacking in positive market catalysts.

“Trading in the precious metal will likely track the similar performance of the benchmark New York Commodity Exchange KUALA LUMPUR

The ringgit is expected to trade more defensively against the US dollar this week due to the escalating budget noises and maintain previous week’s level of 4.14 to 4.16 per greenback, says OANDA head of trading in Asia Pacific Stephen Innes.

“This is despite the positive news that the US Treasury Department’s staff advised Secretary Steven Mnuchin that China isn’t manipulating the yuan.”

On a Friday-to-Friday basis, the ringgit KUALA LUMPUR

The three-month Kuala Lumpur Interbank Offered Rate (Klibor) futures contract on Bursa Malaysia Derivatives is likely to move around current levels this week.

The contracts were untraded throughout (Comex) gold market,” he said.

On a Friday-to-Friday basis, spot month October 2018 rose 44 ticks to RM162.70 per gramme, while November 2018, December 2018 and January 2019 each added 40 ticks to RM162.70, RM163.00 and RM163.05 per gramme respectively.

Weekly turnover rose to eight lots worth RM130,270 from two lots worth RM31,900 previously. Open interest went up to 32 contracts from 25 contracts. — Bernama depreciated to 4.1530/1560 against the US dollar from 4.1440/1490.

Against a basket of major currencies, the local note was traded lower. The ringgit decreased against the yen to 3.6971/7008 from 3.6383/6443, and weakened against the euro to 4.8092/8139 from 4.7639/7714.

The local note declined against the Singapore dollar to 3.0149/0175 from 2.9975/3.0022 and fell against the British pound to 5.4861/4917 from 5.4017/4091. — Bernama the week just ended, with volume and open interest remaining nil. October 2018, November 2018 and December 2018 were all unchanged at 96.27, while March 2019 was pegged at 96.22. The underlying three-month Klibor was pegged at 3.69%. — Bernama COMMODITIES ROUNDUP KUALA LUMPUR

Crude palm oil (CPO) futures contracts on Bursa Malaysia Derivatives will likely remain in range-bound trading at between RM2,100 and RM2,120 per tonne this week amid concerns over production and stocks in the country.

On Wednesday, the Malaysian Palm Oil Board (MPOB) reported that the country’s total palm oil stocks in September 2018 rose 1.45% to 2.541 million tonnes from 2.504 million tonnes in August.

CPO stocks also increased by 10.79% to 1.416 million tonnes during the month from 1.278 million tonnes KUALA LUMPUR

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

For the week just ended, rubber prices were traded mostly lower, taking the cue from external factors, including the regional markets’ performance as well as the crude oil price and the ringgit's movements.

On Friday, the Statistics Department reported that Malaysia’s stocks of natural rubber rose 0.02% to 185,670 tonnes in August 2018 compared with

MONEY MARKET

KLIBOR FUTURES

in the preceding month.

Meanwhile, the market was traded lower for the week just ended. On a Friday-to-Friday basis, October 2018 erased RM26 to RM2,113 per tonne, November 2018 fell RM21 to RM2,145, December 2018 lost RM28 to RM2,193 while January 2019 slid RM20 to RM2,253 per tonne.

Weekly turnover decreased to 192,058 lots from last Friday’s 224,015 lots and open interest narrowed to 298,481 contracts compared with 300,875 contracts.

On the physical market, October South eased RM10 to RM2,120 per tonne. — Bernama

RUBBER

185,640 tonnes at the end of July.

It also said natural rubber production rose 11.4% during the month under review to 62,862 tonnes versus 56,454 tonnes in July. Year-on-year production increased 2.9%.

On a Friday-to-Friday basis, the Malaysian Rubber Board's noon price for tyre-grade SMR 20 slipped 1.5 sen to 545 sen a kg.

Latex-in-bulk eased one sen to 403.5 sen a kg.

The 5 pm unofficial closing price for SMR 20 gained three sen to 550 sen a kg, while latex-in-bulk added one sen to 402.5 sen a kg. — Bernama