By Zarul Effendi Razali
KUALA LUMPUR, June 27 -- Bursa Malaysia is likely to continue to trade in a cautious mode next week on the back of weak external development, including the resurgence of COVID-19 in the United States, as well as bearish economic outlook on the local and global fronts.
Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the FTSE Bursa Malaysia KLCI (FBM KLCI) had corrected quite significantly given that it had fallen below the 200-day moving average.
“Perhaps the markets are trying to see whether the recent spike in the number of new infections in the US could derail the reopening of the affected states’ economies. As such, the FBM KLCI is expected to trade within a tight range of around 1,480 to 1,490 points,” he told Bernama.
Thus far, he said, the data points had been decent such as the US Composite Purchasing Managers’ Index (PMI) which rose to 46.8 points in June from 37 points in May.
Similarly in the UK and eurozone, he said, the Composite PMI increased in June to 47.6 points (May: 30.0) and 47.5 points (May: 31.9) respectively.
“The US initial jobless claims could shed light on the state of the economy. The recent data showed that jobless claims were higher than consensus estimates for the week ending June 19,” he added.
Bursa Malaysia experienced volatile trading throughout the week, in line with the sentiment on the regional markets, as investors were concerned over the International Monetary Fund’s (IMF) latest forecast on global economic growth,
This week, the fund revised the global growth contraction for 2020 to 4.9 per cent from the 3.0 per cent fall it had predicted in April, warning that public finances would deteriorate significantly amid governments’ attempts to combat the fallout from the COVID-19 crisis.
“The COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast,” the IMF said in its World Economic Outlook update.
On the local front, the market was influenced by the World Bank’s latest Malaysia Economic Monitor report released on Thursday, which lowered Malaysia's economic outlook forecast for 2020 to -3.1 per cent from its projection of -0.1 per cent earlier in April.
On a Friday-to-Friday basis, the FBM KLCI slipped 19.12 points to end at 1,488.14.
On the scoreboard, the FBM Emas Index dipped 142.44 points to 10,458.16, the FBMT 100 Index fell 133.67 points to 10,315.81, while the FBM Emas Shariah Index erased 164.77 points to 11,837.31.
The FBM 70 shrank 70.37 points to 12,786.15 but the FBM ACE Index expanded 19.54 points to 6,072.40.
Sector-wise, the Industrial Products and Services Index eased 0.89 of-a-point to 134.30, the Plantation Index dropped 137.96 points to 6,659.59, and the Financial Services Index lost 155.50 points to 12,822.75.
Weekly turnover decreased to 29.69 billion units worth RM13.57 billion from 36.03 billion units worth RM22.07 billion in the previous week.
Main Market volume fell to 15.93 billion shares worth RM billion from 20.16 billion shares worth RM18.39 billion previously.
Warrants turnover narrowed to 1.83 billion units worth RM386.93 million from 2.87 billion units worth RM2 billion the week before.
The ACE Market volume went down to 11.93 billion shares worth RM2.36 billion from 12.81 billion shares worth RM2.98 billion previously.
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