KUALA LUMPUR (March 17): Shares at the local stock market are expected to trend higher next week in line with the improved sentiment at global markets,
Global stocks advanced on Friday, with a benchmark U.S. equity index trading above an important level reached earlier this week, after news of subdued inflation bolstered investment sentiment and helped fuel a retreat in government debt markets, according to Reuters.
A report on U.S. consumer prices in February eased a hawkish view on interest rates, leading the dollar to fall and helping spur the sell-off in bonds. Improving U.S. economic data had recently sparked speculation the Federal Reserve would raise rates sooner than its time frame of late 2014, it said.
The Dow Jones industrial average was down 5.34 points, or 0.04 percent, at 13,247.42. The Standard & Poor's 500 Index was up 1.24 points, or 0.09 percent, at 1,403.84. The Nasdaq Composite Index was down 1.60 points, or 0.05 percent, at 3,054.77.
Affin Investment Bank vice president and head of retail research Dr Nazri Khan said the FBM KLCI was likely to trend higher on global equity upside momentum (FTSE All-World index at best level since August 2011), drop in oil price and strength in Wall Street (Dow Jones at best level since January 2008 following four year low weekly jobless claims, positive FOMC meeting comments and favorable bank stress test results).
Meanwhile, MIDF Research head of equity Syed Muhammed Kifni said foreign buying of Bursa-listed shares continued unrelenting this past week.
“Bursa data shows that foreign investors had been net buyers for 20 consecutive trading days until last Thursday, and we expect a continuation of the “risk-on” mood in the coming week,” he said.
Syed Muhammed said that in the US, a spate of housing numbers were scheduled to be announced next week and consensus expectations were pointing towards further improvements in the housing sector.
On the domestic front, the CPI number due for release in the middle of next week might also potentially be a key market mover, he said
He said the local inflation barometer was expected to further decline from the 2.7% year-on-year recorded in the earlier month.
“Hence barring ominous developments either internally or from the external front, we are sanguine on the ability of the KLCI to retest its all-time high of 1,597 points.
“Technically, we pegged the resistance and support levels for KLCI next week at 1,600 points and 1,560 points respectively,” he said.
Among the stocks that could be in focus on Bursa Malayssia are EP MANUFACTURING BHD [], PHARMANIAGA BHD [], telecommunications, OSK PROPERTY HOLDINGS BHD [].
EPMB is acquiring highway concession owner Maju Expressway Sdn Bhd for RM1.15 billion as part of its plan tp expand its highway concession business.
The move will see EPMB, an automotive parts manufacturer making a foray into the toll road business, and roping in new shareholders into the company.
The firm will acquire Maju Expressway from Bright Focus Sdn Bhd and Ulimas Sdn Bhd under a cash and stock deal. Bright Focus is a unit under the Maju Group of Companies.
Telcos could be infocus after the Malaysian Communications and Multimedia Commission (MCMC) said that it has not issued a memo to telecommunication industry players instructing them to be prepared for a proposed six per cent tax on prepaid phone subsribers.
The telecommunications regulator issued this clarification la Friday following a news report on a Hong Leong Investment Bank Research note on prospects for the local telecommunications industry.
Pharmananiaga plans to expand its market in the Middle East and Southeast Asia, particularly, Saudi Arabia, Indonesia, Myanmar and Vietnam.
Its chairman Tan Sri Lodin Wok Kamaruddin said the company was looking for growth opportunities in these countries including through mergers and acquisitions.
“We are exploring opportunities in Saudi Arabia as it is a growing market,” he sid last week.
OSK Property will raise some RM 24 million from a proposed rights issue which comes with free detachable warrants to finance its capital needs. Subscribers of the rights shares will also be entitled to bonus units from the company.
