Malaysian share prices are expected to trade sideways this week in the absence of fresh leads after a cautious federal budget, although plantation stocks are expected to be strong, dealers said.
The 2006 federal budget released on September 30 had been strongly anticipated, but its conservative focus on reducing business costs, rather than introducing new tax incentives, left market players cold.
"With the budget offering few sustainable leads, market participants are once again scouring for other leads, which are proving to be difficult to come by," said Victor Wan, a senior analyst at Mercury Securities.
"Apart from the booster for the plantation sector, there are few other significant boosters for the broader market, thereby disappointing those that were hoping for renewed infrastructure spending and lower corporate taxes," he said.
Wan said trade was likely to remain rangebound, with the key index trapped between the 920 and 930 levels.
He said one bright spot was plantation stocks, which were chased up during the week on optimism that crude palm oil prices would firm up on favourable outlooks for the nascent biodiesel industry and government promotional efforts.
"Although trading will remain lacklustre, the keen interest on plantation stocks would persist, but this time rotational plays could dominate," he said.
For the week ended October 7, the composite index fell 2.33 points or 0.25 percent to 925.21.
Average daily volume was 413.21 million shares valued at 628.83 million ringgit (166.82 million dollars) compared to 439.90 million shares valued at 749.50 million ringgit in the previous week.
At the close on Friday, the ringgit was traded at 3.7695 to the dollar and 4.5805 to the euro.
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