Malaysian share prices are expected to consolidate next week ahead of the 2007 budget announcement in September, analysts said Friday. Analysts said although the market went through a "correctional phase" over the past week, a lack of fresh leads would continue to dampen sentiment.
"Nevertheless, the market had charted a gradual rise over the past two months, albeit cautiously," said Victor Wan, senior analyst with Mercury Securities. "We expect the market to consolidate pending fresh developments," he said.
Wan said rotational plays in selective lower liners and situational interest such as bio-diesel and construction had helped to boost volume in an otherwise sluggish market. "These plays however, have been stretched and the market has to look for new themes," Wan said adding that even the announcement of Malaysia's Third Industrial Master plan Friday hardly affected the market. The plan outlined steps for the country to achieve global competitiveness over the next 15 years to counter rising competition from neighbouring countries such as China.
He said for the near-term, the 2007 budget would be one of the factors influencing the market although the impact was also predicted to be minimal. "The budget is expected to be accommodative to the people in view of rising living cost while fiscal spending is also anticipated to increase to pump-primp the economy," he said.
The Kuala Lumpur Composite Index fell 0.27 points or 0.03 percent over the week to close at 942.00 on Friday.
Average trading volume was also flat at 490.2 million shares worth 685.1 million ringgit (195.7 million dollars) from 486.9 million shares a week earlier. At Friday's close the ringgit was trading at 3.6755/6780 to the dollar.
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