BURSA MALAYSIA SEEN SUBDUED NEXT WEEK AHEAD OF US INTEREST RATE DECISION

KUALA LUMPUR, Dec 14 (Bernama) -- Trading on Bursa Malaysia is expected to be subdued next week as investors adopt a wait-and-see approach ahead of the Federal Open Market Committee (FOMC) meeting from Dec 17-18 to decide on US interest rates.

UOB Kay Hian Wealth Advisors head of investment research Mohd Sedek Jantan said as attention shifts to the upcoming FOMC meeting, moderating inflation - albeit at a slower pace - provides the US Federal Reserve (Fed) with room to continue its interest rate-cutting cycle.

"A 25 basis points cut at the final meeting of the year appears highly probable, though the pace of reductions may slow as the central bank aims for a soft landing. Market expectations currently indicate a 96 per cent likelihood of a 25-basis-point rate cut, with less than four per cent anticipating rates to remain unchanged," he told Bernama. 

Therefore, Mohd Sedek expects the FBM KLCI to trade within the range of 1,615 to 1,625 next week, supported by optimism surrounding the Fed’s rate cut.

"This aligns with our year-end 2024 FBM KLCI target of 1,650. By saying this, we expect the Composite Index resistance (to be) around 1,616-1,622," he added. 

Additionally, he said stocks linked to the data centre supply chain, technology, and banking sectors are expected to trend upwards if the Fed proceeds with a rate cut.  

"However, if the Fed opts to maintain rates at 4.50 per cent–4.75 per cent, equity markets could react negatively, likely leading to heightened volatility on Wall Street, with potential spillovers into regional markets," he added. 

Meanwhile, the Department of Statistics Malaysia (DoSM) is set to release the November 2024 external trade data. In October, total trade grew by 2.1 per cent year-on-year, albeit at a slower pace.

"For November and December, we anticipate improvement, underpinned by a recovery in the electrical and electronics (E&E) sector and stronger demand for non-E&E commodities, which should provide further support to export growth," Mohd Sedek added.

On a Friday-to-Friday basis, the FBM KLCI fell 4.50 points to 1,608.75 from 1,613.25 in the previous week. 

The FBM Emas Index added 9.17 points to 12,356.07, the FBMT 100 Index rose 9.58 points to 12,037.28, the FBM 70 Index soared 172.0 points to 18,572.21, the FBM Emas Shariah Index advanced 49.06 points to 12,372.19, and the FBM ACE Index was 2.97 points firmer at 5,310.16.

By sector, the Financial Services Index shed 48.18 points to 19,117.43, the Healthcare Index gained 29.98 points to 2,333.66 and the Plantation Index declined 105.21 points to 7,635.05.

 The Technology Index put on 1.85 points to 63.70, the Energy Index dropped 9.13 points to 820.0, and the Industrial Products and Services Index edged down 0.03 of-a-point to 175.77.

Turnover narrowed to 14.46 billion units worth RM12.43 billion compared with 16.18 billion units worth RM14.54 billion in the previous week.

The Main Market volume depreciated to 7.74 billion shares valued at RM11.18 billion from 8.74 billion shares valued at RM13.23 billion last week.

Warrant turnover was trimmed to 4.53 billion units worth RM606.64 million compared with 4.86 billion units worth RM1.36 billion previously.

The ACE Market volume shrank to 2.14 billion shares valued at RM637.07 million versus 2.53 billion shares valued at RM835.68 million last week.

-- BERNAMA