KL bourse set to test 1,308-point level

It is critical that the benchmark index (FBM KLCI) surpasses the 1,308 level, as it will reflect confidence in the market and economy, says a research head

The Malaysian stock market is expected to continue on the uptrend this week, helped by growing confidence in the domestic economy and in the case of banking stocks, by last week's decision by Bank Negara Malaysia to raise interest rates slightly.

Analysts said the benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index may breach the year's high of 1,308 level.

"I think the market is set for a strong rebound and it will test the 1,308-mark," said Jupiter Securities head of research Pong Teng Siew.

He added that

"The GDP (gross domestic product) figures announced recently signal that Malaysia's growth is strong," he said.

The benchmark index reached the high of this year at 1,308.36 on January 21.

Analysts also believe that banking stocks are likely to continue to rise, backed by the recent interest rate increase which will translate into higher interest margins for banks.

The market ended sharply higher last Friday with the FBM KLCI rising 15.69 points, or over 1 per cent, to 1,299.78, its highest level in seven weeks. Banking stocks were the best performers.