KUALA LUMPUR: Hwang DBS Vickers Research said with the bulls still in control, they could be preparing to lift our Malaysian bourse to higher levels hopefully sooner rather than later.

In its market outlook on Monday, Nov 8, it said the benchmark FBM KLCI continued its slow-and-steady climb last week, adding 6.1-point or 0.4%. It reached as high as 1,513.41 before closing at 1,511.74 on Thursday.

The research house said both the FBM 70 Index and the FBM ACE Index also rose in tandem, registering a weekly increase of 0.9% and 2.6%, respectively. Trading activity, nevertheless, stood at a daily average of 1.3b shares (1.3b units before) in volume and RM1.4b (RM1.7b previously) in value during the holiday-shortened week.

"This comes as foreign investors remained net buyers of Malaysia equities for the fifth consecutive month in Oct. Information from Bursa Malaysia last week revealed that foreigners bought more shares than they sold - by a net surplus of RM1.8b - last month, though it was smaller than the net buying amount of RM4.3b in Sept.

"In terms of participation, they contributed 27% of overall trading value in Oct, slightly above the 26% level seen in the first nine months of this year," it said.

Hwang DBS Vickers Research said continuing to be net sellers last month were: (a) local institutional investors with a net selling figure of RM1.4b (versus -RM4.3b in Sep); and (b) retailers, who sold a net amount of RM0.1b worth of stocks, just like in Sept.  As a percentage of total trading value for the whole month of Oct, they accounted for a share of 37% and 21%, respectively.

Following the U.S. Federal Open Market Committee's decision last Wednesday to keep interest rates unchanged while stating its intention to buy US$600b of longer-term Treasury assets between now and June next year, investors would be keen to know too the outcome of Bank Negara Malaysia (BNM)'s monetary policy committee meeting scheduled on Friday, amid a mixed consensus view that our central bank may or may not raise the overnight policy rate just yet.

Elsewhere, the subject of misalignments in global exchange rates will likely be played up once more in the run-up to the Group of 20 Summit this Thursday and Friday.

A combination of liquidity effects (to be fuelled by the U.S. quantitative easing program) and interest rate gap could reinforce the falling US$ trend, prompting overseas funds managers to consider parking their money in Ringgit-quoted assets (like equities) in search for better investment returns.

Other news flows to watch out for this week include: (a) the index of industrial production (IPI) for Sep; and (b) PLANTATION [] statistics for Oct, both due on Wednesday.

In terms of corporate action, the focus will turn to a share swap deal by UEM Land to take over Sunrise (at RM2.80 per share) when both counters resume trading on

Monday.

"From a technical perspective, the FBM KLCI is still rising inside a short-term upward sloping passage. This suggests that the benchmark index is on track to climb - probably step-by-step - towards its all-time peak of 1,525 (which is also our immediate resistance target). A breakout could then send the bellwether to scale greater heights thereafter, possibly making its way to the next resistance barrier of 1,550.

"While a market pullback remains possible at this juncture - considering the index's almost uninterrupted winning streak of 242.6-point or 19.1% in the past 23 weeks - any correction will likely be modest and temporary based on recent patterns. Our first and second support lines are drawn at 1,495 and 1,465, respectively," it said.