KUALA LUMPUR, April 9 — Bursa Malaysia is expected to trend slightly higher next week, hovering within the 1,600-1,620 range, said an analyst.

Rakuten Trade Sdn Bhd equity research vice-president Thong Pak Leng said the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) moved in a tight consolidation mode throughout the last week, but it managed to close above the 1,600 level for two trading days.

"We are cautiously optimistic given the improvement in local market sentiment and foreign support, but investors will stay alert on the increasing market volatility and external uncertainties,” he told Bernama.

Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid opined that Bursa Malaysia’s key index would be moving in a tight range next week.

He said issues surrounding the US Federal Reserve’s aggressive monetary tightening as well as the military conflict in Ukraine would continue to dominate the equity market sentiments next week.

For the week just ended, he said there was concern over possible economic recession on the horizon following the inversion of the US Treasury yield curve when the yield spread between the 10 — and two-year yield turned negative at -7 and -3 basis points on April 1 and 4.

"Typically, the inversion of yield curve would be associated with economic recession given the predictive power it has historically. This could be the reason that the FBM KLCI was having difficulties piercing the psychological level of 1,600 points,” he said.

Mohd Afzanizam noted the US consumer price index (CPI) for March, to be released next week, would be an important data to look at to gauge the US inflation level, whereby the out-turn is expected to be higher by 8.3 per cent year-on-year based on consensus estimates from 7.9 per cent in the previous month.

Meanwhile, the Bank of Canada will also unveil its monetary policy decision next week, whereby the benchmark interest rate is anticipated to be raised by 50 basis points to 1.00 per cent.

"In that sense, the external environment remains choppy and will continue to affect local sentiment. As such, the FBM KLCI should gravitate around 1,600 points next week,” he added.

On a Friday-to-Friday basis, the FBM KLCI improved 4.88 points to end the week at 1,607.29 from 1,602.41 in the previous week.

On the index board, the FBMT100 Index gained 50.62 points to 11,200.62, the FBM Emas Shariah Index rose 168.74 points to 12,202.59, and the FBM Emas Index advanced 79.94 points to 11,551.59.

Meanwhile, the FBM ACE jumped 175.60 points to 5,861.48 and the FBM 70 rose 131.0 points to 14,003.85.

Sector-wise, the Plantation Index lifted 404.84 points to 8,353.60, the Industrial Products and Services Index added 8.12 points to 214.47, and the Energy Index added 24.26 points to 745.0.

The Financial Services Index dropped 126.53 points to 16,782.33, the Healthcare Index shed 22.08 points to 2,165.21, and the Technology Index trimmed 0.79 of-a-point to 76.63.

Weekly turnover grew to 16.94 billion units valued at RM11.29 billion from 14.45 billion units valued at RM10.56 billion last week.

The Main Market volume increased to 11.73 billion shares worth RM10 billion versus 9.90 billion shares worth RM9.50 billion in the previous week.

Warrants volume fell marginally to 1.61 billion units valued at RM257.69 million against 1.95 billion units valued at RM320.47 million previously.

The ACE Market volume advanced to 3.58 billion shares worth RM1.03 billion from 2.58 billion shares worth RM727.76 million the week before. — Bernama