Volatile week expected on Bursa

TRADING on Bursa Malaysia is expected to be volatile this week, driven by unfavourable external developments.

Inter-Pacific Securities Sdn Bhd head of research Pong Teng Siew said for this year, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) was at its lowest on June 28, where it touched 1,657.78 and there is a risk for it to be close to that level.

“Sentiment on the local market is largely influenced by Wall Street’s performance and considering market players’ concerns over US corporate earnings and the outlook for the world’s largest economy, we believe the FBM KLCI would likely be volatile this week.

“We believe the FBM KLCI will trade lower, but do not expect a big drop,” he told Bernama.

On the technical front, PublicInvest Research said the FBM KLCI is anticipated to consolidate between the 1,664 and 1,700 marks, with support levels at 1,622, 1,664 and 1,680, and the resistance levels at 1,700, 1,719 and 1,735.

For the week just-ended, Bursa Malaysia was mostly lower, which was in line with the decline on Asian markets as traders tracked Wall Street’s losses after a steep sell-off in US tech companies.

On a Friday-to-Friday basis, the benchmark FBM KLCI settled 49.08 points lower at 1,683.06.

The FBM Emas Index lost 379.41 points to 11,591.11, the FBMT100 Index decreased 352.77 points to 11,447.22 and the FBM Emas Shariah Index declined 400.75 points to 11,545.37.

The FBM 70 fell 483.41 points to 13,290.74 KUALA LUMPUR

The three-month Kuala Lumpur Interbank Offered Rate (Klibor) futures contract on Bursa Malaysia Derivatives is likely to remain flat this week on lacklustre demand.

Contracts were untraded throughout the week just-ended, with volume and open WEEKLY FBM KLCI and the FBM Ace lost 324.91 points to 4,775.05.

On a sectoral basis, the Finance Index decreased 420.59 points to 17,144.87, the Plantation Index was 102.63 points lower at 7,324.34 and the Industrial Products and Services Index edged down 4.77 points to 168.34.

Weekly turnover decreased to 7.96 billion units valued at RM8.02bil against 10.15 billion units valued at RM10.68bil.

Main Market volume was lower at 5.54 billion shares worth RM7.52bil versus 6.71 billion shares worth RM10.03bil.

Warrants turnover declined to 1.27 billion units valued at RM262.7mil from 1.90 billion units valued at RM357.70mil.

The Ace Market volume declined to 1.14 billion shares worth RM241.96mil from 1.57 billion shares worth RM289.37mil. – Bernama interest remaining nil.

Spot month November 2018 and December 2018 were both pegged at 96.27, January 2019 stood at 96.25, while March 2019 remained at 96.22.

The underlying three-month Klibor was unchanged at previous week’s 3.69%. – Bernama The FTSE Bursa Malaysia KLCI (FBM KLCI) futures contract is likely to trade lower this week, tracking the anticipated weaker underlying cash market.

Inter-Pacific Securities Sdn Bhd head of research Pong Teng Siew said the FBM KLCI would likely trade closer to the 1,657.78 level, its lowest level this year on June 28.

“Sentiment on the local market is largely influenced by Wall Street’s performance and considering market players’ concerns over US corporate earnings and the outlook for the world’s largest economy, we believe the KUALA LUMPUR

The ringgit is likely to trend lower against the US dollar this week, pressured by a slew of external developments and the firmer greenback, dealers said.

FXTM Global head of currency strategy and market research Jameel Ahmad said global sentiment and the performance of stock markets would likely determine the ringgit’s movement this week.

“Whether, global stock markets continue to suffer from the same levels of volatility experienced over the past couple of weeks, will play a major role on how the ringgit performs next (this) week. “If selling in global stocks resumes next week, then the ringgit would most likely suffer from a lack of investor appetite towards emerging markets,” he said.

Jameel said the ringgit also risked being pushed dangerously close to the 4.20 level against the greenback.

“As it stands, the combination of US dollar strength and global market volatility does push the chances of the ringgit falling closer to 4.20 next week than a return to 4.15,” he added.

Meanwhile, Malaysian Industrial Development Finance Bhd chief economist Dr Kamarudin Nor said the ringgit weakened against US dollar to 4.1755 last week, the level last seen in November last year.

He said the ringgit’s performance was also in tandem with that of other regional currencies. FBM KLCI would likely be volatile next (this) week,” he told Bernama.

On a Friday-to-Friday basis, October 2018 trimmed 55.5 points to 1,675, November 2018 and December 2018 declined 56 points to 1,674.5 and 1,672 respectively, while March 2019 gave up 52 points to 1,671.5.

Turnover for the week rose to 59,251 lots from 34,730 lots recorded the previous week, while open interest widened to 48,201 contracts from 32,367 contracts.

The benchmark FBM KLCI settled 49.08 points lower at 1,683.06 from 1,732.14 in the previous week. – Bernama

“This is at the back of a broad-based strengthening of the greenback which observed the dollar index going up to 96.68 points, nearly its 52-week high.

“The ringgit was down 0.42 per cent this (last) week, which makes the year-to-date at 3.078 per cent against greenback,” he told Bernama.

In the near-term, he said concerns about the trade war, a slowdown in China’s economy and monetary policy tightening would influence investors risk appetite towards emerging market currencies, including the ringgit.

Domestically, anticipation over the 2019 Budget is also a factor for the ringgit’s performance, which puts the local unit under pressure this week with little support from declining oil prices, Kamarudin added.

For the week just-ended, the ringgit was traded mixed versus the greenback.

On a Friday-to-Friday basis, the local note weakened to 4.1730/1770 against the US dollar from 4.1560/1600 the previous week.

Against a basket of major currencies, the local note, however, traded mostly higher.

It depreciated against the Singapore dollar to 3.0154/0189 from 3.0129/0169 the previous Friday and vis-a-vis the Japanese yen, the ringgit fell to 3.7282/7321 from 3.6982/7027.

The local currency strengthened against the British pound to 5.3419/3495 from 5.4132/4205 and advanced against the euro to 4.7384/7438 from 4.7619/7674 the previous Friday. – Bernama COMMODITIES ROUNDUP KUALA LUMPUR

The crude palm oil (CPO) futures contract on Bursa Malaysia Derivatives is likely to trade at the current level of between RM2,100 and RM2,130 a tonne this week, said a dealer.

Interband Group of Companies senior trader Jim Teh said traders may adopt a wait-and-see attitude, amid the ongoing trade tensions between the United States and China.

“The uncertainties over the conflict has put pressure on the prices of most commodities,” he told Bernama.

Teh expects demand to likely come from European countries in coming KUALA LUMPUR

The Malaysian rubber market is likely to remain weak this week as the US-China trade war concerns continue to weigh on the minds of market players.

Malaysian Rubber Glove Manufacturers Association President Denis Low Jau Foo said market sentiment was not good among foreign buyers, especially from China.

“The uncertainties from the trade war has affected buying sentiment from China, which will make rubber prices trade lower for next (this) week,” he told Bernama.

The rubber market will also likely follow the price movement on the KUALA LUMPUR

The Kuala Lumpur Tin Market (KLTM) will likely be on a downtrend this week on weaker demand for the commodity as dealers await the Budget 2019 announcement this Friday.

A dealer said the market would wait to see if there were any new catalysts to drive it forward.

“It will be a quiet week and the price would hover between US$19,150 to US$19,300,’’ he said.

On a Friday-to-Friday basis, the

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OIL PALM OUTPUT (in metric tonnes)

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weeks.

On a Friday-to-Friday basis, November 2018 fell RM79 to RM2,046 a tonne, December 2018 lost RM74 to RM2,100 a tonne, January 2019 slid RM76 to RM2,148 a tonne and February 2019 eased RM78 to RM2,200 per tonne.

Weekly turnover decreased to 138,070 lots from 216,904 lots the previous Friday, while open interest rose to 289,003 contracts from 281,512 contracts.

On the physical market, November South eased RM30 to RM2,080 per tonne. – Bernama regional rubber markets, crude oil prices, as well as the ringgit’s performance against the US dollar.

Price fluctuations in the benchmark crude oil would have a significant impact on rubber prices.

For the week just-ended, the rubber market traded mixed, tracking the performance of regional markets.

On a Friday-to-Friday basis, the Malaysian Rubber Board’s noon price for tyre-grade SMR 20 rose three sen to 544.5 sen a kg, while latex-in-bulk slipped nine sen to 395.5 sen a kg.

The 5pm unofficial closing price for SMR 20 eased five sen to 540.5 sen a kg and latex-in-bulk shed 9.5 sen to 395.5 sen a kg. – Bernama KLTM price rose US$240 to US$19,270 from US$19,030 the previous week, while turnover was unchanged and stood at 154 tonnes.

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

The price differential between the KLTM and the LME for the week just ended stood at a discount of US$60 from a discount of US$120 the previous week. – Bernama

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