Shares on Bursa Malaysia are likely to show good momentum next week as most investors return from holiday with 'feel good factors' towards the New Year.

OSK Research, in its Investment Strategy for 2011, said there would be 3E -- earnings, election and easing -- factors to boost the local bourse, and it maintained overweight recommendation on the market.

'Our 2011 FTSE Bursa Malaysia KLCI fair value is 1,648 based on 16 times price/earnings ratio on 2011 KLCI earnings. This provides an upside of some 10 per cent on the benchmark's current level and we remain overweight on the market,' it said.

It said 2011 corporate earnings would be a factor fuelling the market rally to new highs, particularly for sectors with quality earnings that are unlikely to report negative surprises such as the banking, consumer, healthcare and
property sectors.

Apart from that, quantitative easing by the United States which has triggered a flood of liqudity would continue to pour into the region including Malaysia especially in the early part of next year.

At the end of this week, the FBM KLCI rose 7.33 points to 1,518.91 compared to last week's closing of 1,511.58.

The benchmark index ended on Dec 30, 2010 at 1,518.91, up 16.2 per cent compared with 1,272.78 recorded on Dec 31, 2009.

Even though it failed to close at a new high, it managed to hit an intra-day high of 1,529.95, surpassing the all time closing high of 1,528.01 recorded on Nov 10.

The local bourse started the week on a weaker note but climbed steadily in the last two days before Prime Minister Datuk Seri Najib announced that Friday would be a public holiday to celebrate Malaysia's maiden victory in the Asean Football Federation Suzuki Cup championship on Wednesday.

This week also saw the proposed merger between IJM Land and MRCB being scrapped as both parties failed to reach an agreement on the definitive terms of the exercise.

On a weekly basis, the FBM Emas Index improved 46.93 points to 10,374.98, the FBM Top 100 Index advanced 46.87 points to 10,116.56 and the FBM Ace Index surged 93.43 points to 4,347.56.

The Finance Index jumped 58.93 points to 13,856.32, the Industrial Index was 14.56 points higher at 2,832.95 and the Plantation Index surged 88.04 points to 8,036.25.

The total weekly volume dropped to 3.624 billion shares worth RM5.355 billion from 5.747 billion shares valued at RM7.676 billion a week earlier.

The Main Market turnover declined to 2.602 billion shares valued at RM5.16 billion from 4.364 billion units worth RM7.354 billion previously.

Turnover on the ACE Market, however, surged to 427.229 million shares valued at RM73.747 million from 218.796 million shares worth RM52.699 million.

Warrants decreased to 532.831 million units valued at RM103.534 million from 1.149 billion shares worth RM260.4 million previously. -- Bernama