KUALA LUMPUR, Jan 15 (Bernama) -- Share prices on Bursa Malaysia are expected to be steadier next week, backed by selective buying in key bluechips as well as lower liners, dealers said.
They said the market fundamentals remained firm following positive corporate and economic news on the local front as well as on overseas markets.
Affin Investment Bank's Head of Retail Research Dr Nazri Khan said the the bank expects the FTSE Bursa Malaysia KLCI Index (FBM KLCI) to trade higher in the near term.
This, he added, is due to the strong performance of the European benchmark following successful bond sales, the stronger than expected start of the Economic Transformation Programme (ETP) investment cycle and the effects of the approaching Chinese New Year.
He also said the sharp recovery on the European bourse with the UK FTSE breaking 6000, the German DAX breaching 7000 and the French CAC nearing 4000, as well as the Dow Jones breaching the 11,500 mark and the Han Seng being above 24000 among others, as the best catalysts for the emerging markets including the FBM KLCI to trend higher over the next few weeks.
"The fact that the US index was at a 28-month high and the Euro currency made a sharp rebound last week following successful European bond sales, will also sustain risk appetite higher," Nazri told Bernama Saturday.
He said the FBM KLCI is likely to get an upside boost from the whopping RM20 billion oil project investment announced last week which generally surprised most analysts.
He said the approaching Chinese New Year in early February is also likely to influence the "feel good" factor among punters, with a positive effect on stock prices.
"The good performance of second liner stocks and the strong receipt of new initial public offering's (IPOs), are important signs as we approach the Chinese New Year," he explained.
Strategy wise, Affin Investment Bank has picked the oil and gas sector as its favourite, with Kencana, Dialog, Petronas Chemicals, KNM Group and Malaysia Marine and Heavy Engineering, as the best choices for a three-month holding time frame.
On the trading range, the bank has pegged the 1,585-1,600 level as the FBM KLCI target in the near term.
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