Bargain hunting expected to boost trade next week

BURSA Malaysia is expected to trade higher next week with investors likely to go on a bargain-hunting mode following last week’s losses but progress in the COVID-19 vaccine development will weigh on risk appetite.

Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said the local bourse could expect to see further retracement in the glove counters due to COVID-19 vaccine news.

He also expects small capitalisation stocks to start making a comeback.

Asked whether Malaysia’s third-quarter (3Q) gross domestic product (GDP) performance would influence trading next week, he said “it would not because many people have likely priced it in.”

During the week-just-ended, market sentiment was largely influenced by the expansionary Budget 2021 and Pfizer’s successful COVID-19 vaccine Phase 3 trial.

Banking counters surged during mid-week as the blanket moratorium was not extended under Budget 2021, which bodes well for banks’ earnings.

On Friday, Bank Negara Malaysia announced Malaysia’s economy recovered by recording a smaller contraction of 2.7% in 3Q 2020 against -17.1% in the previous quarter.

This upbeat performance, however, is not strong enough to further fuel risk appetite in the market as many investors have factored it in.

Sector-wise, the Financial Services Index ballooned 1,273.55 points to 13,568.01, the Plantation Index bagged 180.82 points to 7,304.2 while the Industrial Products and Services Index added 6.41 points to 156.2.

The Technology Index slipped 0.09 of-a-point to 64.62 while the Healthcare Index decreased 139.18 points to 3,991.15.

Weekly turnover almost doubled to 67.71 billion units worth RM29.51 bil from 34.28 billion units worth RM18.51 bil last week.

Main Market volume surged to 31.07 billion shares worth RM21.53 bil from 16.30 billion shares worth RM13.88 bil.

Warrants turnover increased to 4.46 billion units worth RM807.03 mil from 4.08 billion units worth RM842.51 mil in the preceding week.

The ACE Market volume soared to 32.17 billion shares worth RM7.17 bil from 10.68 billion shares worth RM3.75 bil previously. – Nov 14, 2020

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