KUALA LUMPUR, Sept 28 – Bursa Malaysia is expected to stage a rebound next week, driven by spillover effects from the robust rallies in both China and the United States (US) markets.
UOB Kay Hian Wealth Advisors head of investment research Mohd Sedek Jantan said continuous foreign fund inflows, fueled by expectations of further rate cuts, combined with a strengthening ringgit, could bolster support for the FTSE Bursa Malaysia KLCI (FBM KLCI).
“However, it is critical to recognise that market sentiment remains susceptible to external shocks and domestic developments.
“Therefore, we anticipate the benchmark index to trade within the 1,660 to 1,680 range next week, highlighting the precarious nature of the current market environment,” he told Bernama.
Mohd Sedek noted that the renewed optimism on China’s latest stimulus measures suggests a potential rebound in its economic activity, which is likely to drive demand for commodities, particularly in sectors such as oil and gas, plantation, and building materials.
Moreover, China is set to release both the official and Caixin purchasing managers index (PMI) data on Monday.
He is projecting a slight recovery in the official manufacturing PMI to 49.3 from 49.1, which could provide further insights into the trajectory of China’s economic recovery.
“In addition to these developments, we expect strong buying momentum on Wall Street, driven by renewed confidence in the semiconductor and technology sectors to spill over into local equities.
“This is particularly relevant for the Bursa Malaysia technology index, which experienced losses in the previous trading week. Small-cap stocks, in particular, stand to gain from this improving sentiment,” Mohd Sedek explained.
The local bourse traded mostly lower during the week on profit-taking amid positive regional sentiment after China unveiled fresh stimulus measures.
