Bursa Malaysia is expected to see more upside trading next week in tandem with regional strength, driven by local property and banking stocks ahead of the 13th General Election (GE).
Affin Investment Bank head of retail research Dr Nazri Khan said global stocks, including Bursa Malaysia, were likely to extend gains as sentiment was boosted by the new record levels on Wall Street following optimism over the US economy and expectations of more stimulus from global central banks.
"We believe the Dow Jones' ability to hit the pre-crisis levels since March 2009 cyclical low will boost investor psychology and attract more sidelined investors into the market," Nazri told Bernama.
The FTSE Bursa Malaysia KLCI (FBM KLCI) would also get support from a solid Asian session last week that saw the Nikkei 225 surging 2.5 per cent, Shanghai added 1.3 per cent and Sydney rose 1.2 per cent to a four-and-a-half year high, he said.
On inter-sector analysis, Affin expected bullish performance from key local sectors to confirm the underlying market strength as reflected by Finance and Consumer sectors, which is only one per cent below all-time high, and the roaring Properties sector which gained 3.5 per cent this week and hit a two-year high.
As for domestic catalyst, the kickstart of the high speed KL-Singapore rail, the completion of MRT Circle Line 1 and LRT extension, coupled with higher property prices in Singapore, will continue to create a lot of buzz for stocks of local property players based in KL and Johor.
Further, the tabling of Financial Services Act (FSA) in Parliament could also be a market-moving event for the local banking stocks.
"Ultimately, we expect the impending FSA to be a catalyst and spur merger play among local financial stocks, notably Public Bank and Hong Leong Bank which are almost at an all-time high," Nazri said.
As for stock picks, given the 13th General Election uncertainties, the most prudent strategy is to stick with politically neutral stocks, stocks that have upside technical momentum now, stocks that are renowned for high-dividend yield
and those that pay decent dividends in the second quarter (April-June 2013) when the GE is expected.
"This gives us three sectors namely REIT, Properties and Finance sectors with Pavillion Reit, Axis Reit, Naim Holdings, Multi-Purpose Holdings, Sunway, Bursa Malaysia and MBSB as our favourites stocks for three-months holding time frame," he said.
For the week just ended, despite having the Sulu-Sabah military standoff, the lcoal bourse remained robust and saw improved market breadth, with average daily gainers/losers at 4:2 and average daily trade totalling 1.1 billion shares worth RM1.7 billion, suggesting a strong recovery in the buying momentum.
As the Federal and state governments have all the tools they need to control the infighting, the Sulu-Sabah standoff pose no material risk going forward.
"Hence, we do not see any adverse impacts on major Sabah-based stocks -- especially in oil and gas, timber and plantation, as reflected by stocks linked to Sabah such as UMW, Malaysia Marine, Dayang, Perdana Petroleum, Bintulu Port, Lingui, Sime Darby and even Karambunai which continued to be steady, resilient
and healthy at this point of time," Nazri said.
On a Friday-to-Friday basis, the FBM KLCI rose 16.5 points to 1,653.96 from last Friday's 1,637.44.
The Finance Index climbed 135.5 points to 15,299.48 and the Industrial Index rose 29 points to 2,836.5.
The Plantation Index jumped 78.8 points to 7,943.91.
The FBM Emas Index soared 146.8 points to 11,291.15, FBMT100 edged up 137.7 points to 11,135.5, FBM Ace Index was 0.2 of a point lower at 3,990.16 and the FBM Mid 70 Index leapt 275.8 points to 2,461.44.
The weekly turnover improved to 4.530 billion worth RM8.326 billion, versus last week's 4.43 billion units valued at RM7.76 billion.
The Main Market volume increased to 3.761 billion shares worth RM8.240 billion from last week's 3.461 billion shares worth RM7.663 billion.
The ACE market volume fell to 627.021 million shares valued at RM66.964 million from 844.908 million shares worth RM87.095 million last week.
Warrants rose to 138.149 million units worth RM66.964 million versus 125 million units valued at RM8.111 million previously.-- Bernama