Malaysia: The equity market is expected to be relatively good for first quarter of 2018 as analysts believe the spill-over effect of the favorable seasonal factor coupled with improved buying interest/momentum to be the supporting factor for the positive uptrend.
Emphasising that the trend is a short-run, Kenanga Investment Bank Research said as at end-2018 the FBM KLCI index is targeted to reach 1,860 points.
"Besides, the undemanding valuation of FBM KLCI against regional peers is likely to attract more foreign interest on top of the favorable uptrend of ringgit and crude oil.
"We believe investors should start nibbling if and when the benchmark index retraces below 1,765, the research house said.
The firm also said 2018 could be an eventful year on the global backdrops including normalisation in interest rate, and uncertainties over the new tax reform in US.
On the domestic front, concerns over the impact of pre and post general election 14 are raised as well.
Besides, the recent run-up in commodities price, the final phase of RAPID (refinery and petrochemical integrated development project) development, recent corrections in construction sector/stocks, better luck factor for gaming stocks going forward, potential impact of La Niña over plantations sector, and the 2018 FIFA World Cup Russia, could probably provide selective investment opportunities for investors.
MIDF Amanah Investment Bank Bhd head of research Mohd Redza Abdul Rahman said the FBM KLCI retreated on Monday, dampened by profit-taking in bluechips and selected heavyweights, with banks, telecommunications and plantations being the leading losers.
He said Public Bank Bhd, CIMB Group Holdings Bhd and Axiata Group Bhd pulled the index lower despite Malayan Banking Bhd still maintains net 10 sen up.
"The other top 15 index weight gave up some of the gains from Friday, but still next positive. PPB Group Bhd and Nestle (Malaysia) Bhd lost even more but impact is minimal due to smaller index weight,” he said.
The FBM KLCI closed at 1,782.7 points on its first day trading in 2018, or 14.11 points lower than Friday.
It starts the new year lower, retreating from 2017's upward momentum.
At 9.05 am, the benchmark FBM KLCI stood at 1,782.11, down 14.7 points, from Friday’s close of 1,796.81.
On domestic currency, MIDF chief economist Dr Kamaruddin Mohd Nor said ringgit is en route to breach 4.0 psychological level this week amid positive macro outlook as well continuous interest from foreign investors.
“Weakening dollar as indicated by fall in dollar index is pushing ringgit as well. We are also anticipating positive interest from foreign investors to support ringgit,” he said.
Ringgit closed the day at 4.0180/0210 versus the US dollar against 4.0440/0500 recorded on December 29.
The currency remained on a firm trajectory as it enters the new year, opening higher against the underperforming greenback yesterday morning on better demand for the local note amid higher global oil price.
At 9am, the local unit stood at 4.0370/0400 against the greenback from 4.0440/0500 at the close on Friday.
A local news report said the greenback continued to endure subdued demand after hitting a three-month low against a basket of its peers on Friday and experienced losses for 2017 to 9.8 per cent, its worst performance since 2003.
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