Malaysian shares are expected to trade cautiously next week in the wake of higher interest rates, dealers said. "Trading activities may turn cautious as traders and investors weigh the impact of rising interest rates on the economy," said Victor Wan, a senior analyst at Mercury Securities.
"Due to the general overbought position of the market, including the Mesdaq board, the market could be in for a period of consolidation or correction," he warned. Rising volumes had also not been accompanied by a higher market index, raising concerns that some shares distribution may be in progress, he noted. "Hence, traders are advised to adopt a cautious stance in the short-term as the market is entering in to a period of uncertainty," he added.
He predicted that there could be more interest rate hikes in the pipeline after the central bank this week raised its key interest rates for the third time in less than six months in a bid to combat rising inflation.
For the week ending April 28, the Kuala Lumpur Stock Exchange composite index gained 1.04 points, or 0.1 percent, to 949.23.
Average daily volume was 1.254 billion shares worth 1.312 billion ringgit (362 million dollars) compared to 977.79 million shares worth 1.042 billion ringgit in the previous week.