Bursa Malaysia to trade cautiously this week
Published on: Monday, October 15, 2018
Kuala Lumpur: Bursa Malaysia is likely to trade cautiously this week with domestic and external factors continuing to dictate the market, said analysts. Inter-Pacific Securities Sdn Bhd Head of Research Pong Teng Siew said the market would be dependent on how the US market performed at its close on Friday. "If the Dow Jones Industrial Average manages to follow through on tonight's rebound and if the rebound was strong enough, then there might be enough appetite for investors to take risks.
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"But if the recovery tonight is not very convincing, then that could set the stage for more selling on Monday. I think investors would want to wait and see what happens in the US markets (at its close on Friday)," he told Bernama. Pong noted that Budget 2019 had been viewed with quite an anticipation in the market."There was talk about more taxes to clear the government's debts. This is introducing a bit of uncertainty in the market, as to whether the market thinks these taxes are going to be painful enough or there will be only a small increase in taxes."But most investors are waiting to see how much of an increase in revenue raising the government is going to engage in," he added.
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Meanwhile, OANDA Head of Trading in Asia Pacific Stephen Innes said the US Treasury Department would release its currency report on Monday, with some rumours saying they would not classify China as a currency manipulator."This could avert an emerging Asia currency meltdown and would forestall an escalation of the US-China trade war. We will have a much more positive tone provided there is no currency manipulation noise from President Trump," he added.
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Innes said Budget 2019 headlines would intensify ahead of its announcement on Nov 2, and this could keep investors nervous. In the week just ended, Bursa Malaysia underwent a volatile week, starting on a weak note on Monday on the back of rising US government bond yields and a weak Chinese market after its Golden Week.Further weaknesses shrouded the market on Wednesday in line with Wall Street's declining performance on fears of rising interest rates. The local market recovered on Friday on bargain hunting activities. Stay up-to-date by following Daily Express’s Telegram channel.
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