Bursa Malaysia Seen Retesting 1,700 Level Amid Improved Risk Sentiment

By Nurunnasihah Ahmad Rashid

KUALA LUMPUR, June 6 (Bernama) -- Bursa Malaysia’s benchmark index is potentially retesting the 1,700 level and consolidating within the 1,710–1,715 range next week, supported by improving risk appetite and attractive valuations among selected Malaysian blue chip counters.

IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan said the rebound in the FTSE Bursa Malaysia KLCI (FBM KLCI) during the final two trading sessions of the week, following the sustained weakness seen in May, suggests that near-term market sentiment may be stabilising.

"As enthusiasm surrounding the artificial intelligence-driven rally begins to moderate, investors may increasingly rotate into the defensive sectors and undervalued large-cap stocks outside the US market.

"We also see scope for foreign investors to re-enter the market after three consecutive weeks of net selling,” he told Bernama.

Mohd Sedek said that while stronger US economic data could continue to underpin global risk appetite, elevated valuations in US equities may prompt investors to seek opportunities in emerging markets where valuations remain relatively attractive.

"Malaysia stands to benefit from such a reallocation of capital flows," he added.

Meanwhile, Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng said the firm remains cautiously optimistic, noting that buying interest in blue chip counters continues to be supported by their attractive valuations.

“Nevertheless, uncertainty surrounding the US-Iran conflict remains a key overhang, with little progress towards a comprehensive peace agreement amid renewed hostilities in recent days.

“While bargain hunting may continue to provide support to the local market, investors are likely to stay selective given lingering geopolitical risks and uncertainty over the global economic outlook,” he said.

For the shortened trading week, Bursa Malaysia ended mostly higher on bargain-hunting activities, with sentiment boosted after Prime Minister Datuk Seri Anwar Ibrahim ruled out a snap general election in the near term and reiterated the government's focus on maintaining national stability and driving economic recovery.

The local bourse was closed on June 1 (Monday) and June 2 (Tuesday) in conjunction with the King’s Birthday and the replacement holiday for Wesak Day.

On a Friday-to-Friday basis, the barometer index rose 10.36 points to 1,693.43 from 1,683.07 a week earlier.

On the index board, the FBM Emas Index increased by 21.94 points to 12,602.06, the FBMT 100 Index gained 24.36 points to 12,441.90, the FBM Emas Shariah Index slipped 33.92 points to 12,570.15, while the FBM Mid 70 Index slipped 184.73 points to 18,299.60, and the FBM ACE Index fell 30.57 points to 4,733.24.

By sector, the Plantation Index was up 172.0 points to 8,671.54, the Energy Index added 17.45 points to 796.20, the Financial Services Index widened 260.02 points to 19,784.31 and the Industrial Products and Services Index inched up 0.92 of a point to 198.74.

Weekly turnover was only 10.73 billion units valued at RM11.32 billion from 14.77 billion units valued at RM21.55 billion a week earlier.

The Main Market volume narrowed to 6.10 billion units valued at RM10.31 billion from 9.13 billion units valued at RM20.32 billion previously.

Warrants turnover dwindled to 2.97 billion units valued at RM406.42 million compared with 3.38 billion units valued at RM422.21 million last week.

The ACE Market volume dropped to 1.65 billion units valued at RM600.11 million from 2.25 billion units valued at RM801.54 million in the previous week.  

-- BERNAMA