KL shares may trade steadier this week

Bursa Malaysia is likely to trade higher next week with sentiment remaining bearish as investors seek a more clearer picture of the European Union (EU)'s plan to deal with the debt crisis.

Affin Investment Bank head of retail research Dr Nazri Khan said the key FTSE Bursa Malaysia KLCI was likely to trend towards the 1,500 points level on global liquidity and economic optimism.

The optimism followed a coordinated move by central banks, including China and Brazil, to ease monetary policies, rising expectation of an aggressive cut in the European Central Bank interest rate and stronger EU deal to resolve the debt crisis.

He said the next upside resistance should be at the 200-day moving average of 1,500 points level while the short-term support was likely around the 1,440 points level.

Dr Nazri said despite gains noted worldwide, the liquidity move was yet to address the core problems Europe faced in finding sustainable funding solution to the troubled European banking community.

"Overall, we reckon the liquidity has been effective for now as a temporary psychological booster to the frail investor confidence," he said today.

On the local front, Dr Nazri said the year-end festive season and positive newsflow such as Petronas' building of a third natural gas terminal in Lumut, Perak, and the potential merger between ECM Libra Financial Group and K&N Kenanga Holdings served as a positive sentiment to the local bourse.

"While we believe short-term momentum might be slightly overbought, the key index possibly has already priced in all the potential negative news it needs to digest," he said.

Dr Nazri suggested investors accumulate holiday-season beneficiary stocks which perform well during festive year-end such as DiGi, Airasia, Petronas Dagangan, Dutch Lady, AEON and Bonia.

For the week just-ended, the key index ended higher, in tight-range trading, supported by fund managers' interest in finance stocks which pushed the index to an intra-day high of 1,502.53 points on Thursday.

The benchmark index closed the week 57.47 points higher at 1,489.02, the Finance Index surged 509.32 points to 13,292.90, the Plantation Index jumped 218.04 points to 7,826.77 and the Industrial Index added 97.83 points to 2,694.92.

The FBM Emas Index advanced 353.64 points to 10,169.61, the FBM Mid 70 Index perked 327.53 points to 11,023.44 and the FBM Ace Index increased 26.98 points to 4,158.98.

The weekly volume decreased to 6.21 billion shares, worth RM6.74 billion, from 7.27 billion shares, worth RM5.51 billion, recorded last week.

The Main Market turnover slipped to 4.85 billion units, worth RM6.55 billion, from 5.61 billion units, worth RM5.28 billion, registered previously.

Volume on the ACE Market fell to 855.73 million shares, valued at RM124.33 million versus 1.06 billion units, valued at RM157.32 million, transacted last week.

Warrants declined to 471.09 million units, worth RM51.44 million, compared with last week's 564.09 million units valued at RM65.47 million. -- Bernama

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