FBMKLCI likely to trend higher

Bursa Malaysia is likely to trend higher, with the FBM KLCI moving towards the 1,520 point level next week on firmer commodity prices and the banking sector's optimism on liberalisation in the domestic financial services sector.

Affin Investment Bank head of retail research Dr Nazri Khan said external factors such as improving global equity outlook following the European Central Bank's aggressive funding and America's stronger economic data may also lend support to the market.

"Currently, the FBM KLCI is only down by 1.9 per cent this year, making it among the most defensive market and the top five best performing Asian Indices in 2011, outperforming other major overseas markets as China, Brazil, India and Hong Kong, all of which are down more than 10 per cent year-to-date," he said.

Stronger gains in commodities would also benefit commodity-based exchange, including FBMKLCI, he said.

On the local front, there were ample news to spice the final trading week of the year, which includes Boustead's proposal to buy Exxon Mobil Asean oil asset, MAS-AirAsia-AirAsia X business model rationalisation, Muhibah's RM1 billion venture in Australia and YTL Cement's proposed buyout by the parent YTL Corp.

Financial stocks such as CIMB, AMMB, BIMB, AFG, KAF and ECM may be good buys following the Second Financial Sector Master Plan.

These are the stocks to watch for next week.

Dr Nazri said traders would still have to be cautious on lower volume ahead of the Christmas and New Year holidays which may leave the market susceptible to mild volatility over the next two weeks.

The market will be closed on Monday (Dec 26) for the Christmas public holiday.

For the week just-ended, the key FBM KLCI rose 29.93 points to 1,496.15 from 1,466.22 a week earlier, bolstered by regional funds, taking advantage of the domestic market's defensiveness.

The market was mostly moderate, with "window-dressing" activities dominating trading, as investors sought quality stocks ahead of the year-end.

The Finance Index rose 205.98 points to 13,364.57 but Plantation Index fell 103.28 points to 7,967.39 and the Industrial Index was 28.97 point higher at 2,678.49.

The FBM Emas Index gained 199.03 points to 10,253.52 but the FBM Ace Index lost 94.44 points to 4,038.81.

Weekly volume dwindled to 7.046 billion shares worth RM4.996 billion from 8.274 billion shares worth RM6.181 billion on Friday.

The Main Market turnover declined to 3.883 billion units valued at RM3.799 billion from 3.881 billion units worth RM5.384 billion Friday.

Warrants eased to 1.414 billion shares worth RM805.043 million from 2.358 billion shares worth RM443.937 million last week.

Volume on the ACE Market tumbled to 1.679 billion units worth RM187.256 million from 1.980 billion units valued at RM340.510 million on Friday. -- Bernama