Bursa Malaysia Set for Cautious Week Amid Global Uncertainties

Bursa Malaysia's benchmark index is expected to remain cautious next week due to global uncertainties. Higher oil prices and geopolitical tensions are likely to keep inflation expectations elevated, while shifts in US interest rate expectations may influence global bond yields and emerging-market flows.

IPPFA Sdn Bhd director of investment strategy and country economist Mohd Sedek Jantan stated that investor positioning will remain defensive with greater interest in sectors offering resilient earnings and domestic or commodity-linked exposure. This could provide some insulation from weakness in technology-heavy regional indices, particularly if higher oil prices continue to pressure global risk appetite.

Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng expects the benchmark index to remain in consolidation next week, with scope for a technical rebound should oil prices and US Treasury yields ease. However, persistent foreign selling, a strong US dollar, and expectations of further US monetary tightening are likely to cap the upside.

The market's defensive characteristics may bring valuations to more attractive levels, encouraging local institutions and bargain hunters to rebuild positions in selected blue chips. Thong expects the benchmark index to trade within the 1,650-1,680 range next week, with a sustained move above 1,675-1,680 needed to restore stronger upward momentum.