Share prices on Bursa Malaysia are set to be resilient and trend higher next week, riding on its status as a safe haven market during volatile times and defensive foreign funds rotation.

Affin Investment Bank, Vice President, Head of Retail Research Dr Nazri Khan said the FTSE Bursa Malaysia KLCI (FBM KLCI) is expected to strongly play catch-up over the next few weeks, outperforming its peers during volatile times as it did in late 2011, due to its 2012 year-to-date underperformance.

Based on historical precedent, Malaysian equities are expected to out perform on a relative basis during volatile time, he added.

"Still we expect ample negative drivers to remain cautious this week, including global growth fears due to disappointing global economic data, an absence of aggressive global central bank monetary stimulus, massive downgrades of global investment banks and weaker commodities.

"Despite that, we believe what the market got last week was more evidence of "international bad news which is local good news" and a reinforced global perception of Malaysia as a safe haven during volatile times," he said.

Nazri said the regional selldown had prompted investors to rotate money from high beta emerging markets to low beta emerging markets, which includes Malaysia and the Philippines.

"Given that the 1,600 level has been broken, Malaysian stocks are expected to continue performing well next week towards a new all-time high of 1,620, as more foreign investors bet on the relatively high yield stocks of Bursa Malaysia," he added.

Additionally, the local market should also get some support in the wake of the impending general election and the floatation of the local mega IPOs of Felda Global Ventures and Integrated Healthcare.

"The growing consensus among traders is that in the run-up towards the elections, there will be government support and institutional accumulation for mega IPO, which theoretically should underpin the local stock market," Nazri said.

For the week just ended, the market remained on positive territory, crossing the 1,600 points level, despite the slide on regional markets on renewed concerns over the weak global market sentiment.

The FTSE Bursa Malaysia KLCI (FBM KLCI) moved between the closing level of 1,582.73 and 1,604.39.

On a Friday-to-Friday basis, the FTSE Bursa Malaysia KLCI increased 22.1 points to 1,603.07 compared with last Friday's closing of 1,579.23.

The Finance Index added 126.7 points to 14,254.05, the plantation Index appreciated 79.2 points to 8,506.63 and the Industrial Index decreased 325.3 points to 2,823.64.

The FBM Emas Index edged up 174.1 points to 10,956.82, the FBM ACE Index advanced 108.3 points to 4,309.60 and the FBM Mid 70 Index soared 262.3 points to 12,048.06.

The weekly volume rose to 4.848 billion shares worth RM6.437 billion from last week's 3.768 billion shares valued at RM7.207 billion.

The main market turnover increased to 3.369 billion units worth RM6.229 billion compared with 2.778 billion shares valued at RM7.046 billion previously.

Volume on the ACE Market edged up to 708.342 million shares valued at RM132.955 million from the 632.319 million shares worth RM108.536 million registered last week.

Warrants increased to 708.324 million valued at RM132.955 million against last week's volume of 352.666 million units worth RM49.584 million. -- BERNAMA