KUALA LUMPUR: Bursa Malaysia will likely trade lower next week, mainly due to the weakening ringgit amid heightened speculation of an interest rate hike by the US Federal Reserve (Fed) in December.
Affin Hwang Investment Bank Vice-President/Head of Retail Research Datuk Dr Nazri Khan Adam Khan said next week was going to be tough for the local bourse.
He said among the factors that would put pressure on Bursa Malaysia included the weaker ringgit, which fell to a 10-month low on Friday at 4.40 against the US dollar, and lower commodity prices.
"Furthermore, Fed Chair Janet Yellen's remarks has strengthened the possibility of an interest rate hike as soon as next month.
"This will pull 'hot money' out of ringgit-denominated bonds into US dollar-denominated bonds," he told Bernama.
However, Nazri Khan reiterated that all of these were only speculative money."The real inflow of foreign funds will come in next year as a result of Prime Minister Datuk Seri Najib Abdul Razak's visit to Beijing earlier this month, which saw a total of RM143.64 billion worth of business deals signed between Malaysia and China.
"We believe this will neutralise the ringgit in the near-term," he added.For the week just-ended, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) slipped 10.37 points to 1,623.80 from 1,634.17 last Friday.
On a week-to-week basis, the FBM Emas Index declined 45.04 points to 11,459.21, the FBMT 100 Index fell 44.55 points to 11,170.41 and the FBM Emas Syariah Index was 10.69 points lower at 12,093.22.
The FBM Ace increased 40.58 points to 5,005.17 and the FBM 70 improved 43.85 points to 13,394.
On a sectoral basis, the Finance Index fell 166.11 points to 14,117.02, the Industrial Index shed 45.31 points to 3,064.17 and the Plantation Index perked 8.46 points to 7,768.48.
Weekly turnover decreased to 7.33 billion units, worth RM8.76 billion from 8.86 billion units, worth RM10.73 billion, registered last Friday.
Main market volume contracted to 5.04 billion units, valued at RM8.34 billion from 5.82 billion units, valued at RM10.18 billion, recorded last week.
Warrant turnover declined to 1.29 billion shares, valued at RM242.51 million from 1.70 billion shares, valued at RM372.54 million previously.
The ACE market shrank to 985.74 million shares, valued at RM159.06 million from 1.32 billion shares, valued RM177.08 million last week. — Bernama