KUALA LUMPUR: Stock prices on Bursa Malaysia are likely to stage an oversold bounce next week, correcting an oversold situation and track a slow U-turn of Asian regional indices, an analyst said.
After declining to a five-week low, the FTSE Bursa Malaysia KLCI (FBM KLCI)
is expected to climb to the 1,850 points level, said Affin Investment Bank Vice-President/Head of Retail Research Dr Nazri Khan.
Regional markets are recovering slowly following the dovish stance by the Bank of England and European Central Bank to maintain easy interest rates for an extended period of time, he told Bernama.
Despite the holiday-shortened week, Nazri said the FBM KLCI may rebound with lower liners, specifically in the oil and gas sector, attracting an inflow of bigger funds.
The stock exchange will close for two local holidays next week; the Prophet Muhammad's birthday on Jan 14 and the Thaipusam religious festival on Jan 17.
The immediate support for the index remains at the 1,820 and 1,800 points level while the immediate resistance level stood at 1,880, 1,860 and 1,850 points.
"We see last week's correction as a bullish 'return moves' after FBM KLCI made a strong breakout," he said.
Therefore, traders should take advantage of the current oversold situation to swing new positions, Nazri said.
Developments that will catalyst the market will include the government's decision to invoke Section 114 of the Water Services Industry Act 2006, forcing Selangor's water assets to be taken over by Kumpulan Darul Ehsan Bhd and Scomi Energy which bagged two major contracts from Petronas Carigali Myanmar and Petronas Carigali Hong Kong.
As for strategy, oil and gas-related counters such as UMW Oil Gas, Dayang, Uzma, Yinson
, Coastal and Perdana Petroleum, looked the most promising with more upswing in the offing, Nazri said.
On a Friday-to-Friday basis, the FBM KLCI declined 3.44 points to 1,831.3, the Finance Index declined 83.08 points to 16,721.02, the Industrial Index slipped 27.51 points to 3,104.48 and the Plantation Index lost 112.38 points to 8,714.63.
The FBM Emas Index shed 0.45 of a point to 12,678.3, the FBMT100 Index dropped 15.4 points to 12,387.32 but the FBM 70 went up 13.87 points to 14,107.61 and the FBM Ace rose 286.16 points to 5,962.68.
Weekly total turnover surged to 9.14 billion shares, worth RM9.66 billion from, 5.34 billion shares, valued at RM5.91 billion, recorded last week.
Main market volume increased to 6.67 billion shares, valued at RM9.06 billion, from 4.15 billion shares, worth RM5.67 billion, registered previously.
Warrant turnover rose to 215.56 million units, worth RM26.30 million, from 154.81 million units valued at RM17.29 million.
The ACE market volume rose to 2.21 million shares, valued at RM520.58 million, from 1.03 billion shares, worth RM217.98 million, transacted last week. - Bernama
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