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Bursa Malaysia's FBM KLCI Anticipated to Recover Slightly Next Week
KUALA LUMPUR, May 25 - The FTSE Bursa Malaysia KLCI (FBM KLCI) is set to experience a moderate recovery next week due to continued bargain hunting, following recent losses. This optimistic outlook is based on the expectation that domestically focused sectors will benefit from consumption-led growth and ongoing fiscal support, according to Mohd Sedek Jantan, the head of investment research at UOB Kay Hian Wealth Advisors Sdn Bhd.
However, the recovery may have limitations, as there is no fresh macro or policy catalyst to drive significant upside momentum. This potential confinement near the psychological resistance level of 1,555 could result in reduced trading activity as market participants reassess the valuations and risk-reward dynamics, Jantan told Bernama.
The market saw a rebound last week after a six-day losing streak on Friday, buoyed by bargain-hunting that improved risk sentiment. However, the FBM KLCI ended the week at 1,535.38, having fallen 36.37 points from its previous close of 1,571.75.
A closer look at the indices reveals declines in key indices throughout the week, including the FBM Emas Index, FBMT 100 Index, FBM Emas Shariah Index, FBM 70 Index, and the FBM ACE Index. Meanwhile, sectors such as the Financial Services Index, Industrial Products and Services Index, and Energy Index experienced losses, while the Plantation Index shrank, and the Healthcare Index gained slightly.
Total turnover decreased slightly to 14.05 billion units valued at RM11.28 billion from the previous week's 14.98 billion units valued at RM12.68 billion. The drop in the Main Market volume and Warrant turnover was also noted, with the ACE Market volume also narrowing.
The current market sentiment remains cautious due to ongoing global uncertainties surrounding US trade discussions and central bank expectations. Investors are awaiting more clarity on earnings and policy developments, contributing to a mixed-to-negative market mood, not only in Malaysia but also in regional markets.
While the expectation is for continued volatility in the coming weeks, analysts are not forecasting an immediate breakout above the 1,555 resistance level without a notable improvement in the global trade sentiment or local corporate earnings. Investment strategies for the period emphasize portfolio diversification and an emphasis on quality growth and income stocks with domestic resilience. However, continued monitoring of geopolitical and tariff-related risks is advised.
- Amid the cautious market sentiment in Kuala Lumpur, the Healthcare Index experienced a slight gain, indicating a resilience in Malaysia's domestic healthcare sector.
- Despite Bursa Malaysia's FBM KLCI anticipating a slight recovery next week, potential limitations may confine the index near the resistance level of 1,555, as no fresh macro or policy catalysts are driving significant upside momentum.
- As global uncertainties surrounding US trade discussions and central bank expectations persist, investors in Malaysia's Finance and Business sectors should focus on portfolio diversification, quality growth, and income stocks with domestic resilience, while being mindful of geopolitical and tariff-related risks.
