The FTSE Bursa Malaysia KLCI (FBM KLCI) is likely to trade firmer next week given better external developments which will spur investor interest for risky assets, dealers said.

Vice-President/Head of Retail Research, Affin Investment Bank, Dr Nazri Khan said the FBMKLCI was expected to trend higher in tandem with global strength following the resolution of some important political uncertainties following the leadership transition in China and the US.

"The cash market would see rotation play ahead of the year-end window dressing.

"We note that the global sentiment has improved slightly following positive economic data and US fiscal cliff progress kept traditional year-end bullishness in play.

"This is due to the bigger-than-expected fall in weekly US jobless claims and US non-manufacturing purchasing managers index data," Nazri said.

He added that investors would give their attention to China's trade balance and the Federal Reserve's monetary policy in order to better gauge the outlook for the US and China economy.

"As for local fundamentals, we expect the year-end Economic Transformation Programme (ETP) and Johore corridor progress reports to be the two most important local forces to drive the KLCI higher in the last month of 2012," Nazri said.

ETP investments in the third quarter grew 26 per cent, year-on year, and latest project announcements in Johore would be significant in attracting foreign direct investment before the start of the New Year, he added.

Throughout the week, the local bourse ended a volatile trading week slightly higher in the absence of fresh internal and external catalysts.

For the week just-ended, the FBM KLCI rose 6.94 points to 1,617.77 from last week's 1,610.83.

The Finance Index improved 85.13 points to 15,040.19, the Industrial Index garnered 30.16 points to 2,686.80 while the Plantation Index erased 69.15 points to 7,838.29.

The FBM Emas Index increased 26.42 points to 11,005.90, the FBMT100 was 29.91 points higher at 10,859.14, the FBM ACE Index eased 7.91 points to 4,166.24 and the FBM 70 Index slipped 45.78 points to 12,008.33.

Weekly turnover fell to 4.199 billion shares, valued at RM6.171 billion, from 5.39 billion shares, valued at RM8.62 billion, last Friday.

The Main Market volume decreased to 3.268 billion shares, worth RM6.052 billion, from 4.09 billion shares, worth RM8.43 billion, previously.

The ACE market volume dipped to 723.287 million shares, worth RM105.34 million, from 936.84 million shares, worth RM170.87 million, last Friday.

Warrants declined to 196.06 million, worth RM11.021 million, from 382.66 million units, valued at RM18.72 million, last week. -- BERNAMA