KUALA LUMPUR: The FTSE Bursa Malaysia KLCI (FBM KLCI) futures contract on Bursa Malaysia Derivatives is set to experience volatility next week as it coincides with the United States (US) Presidential election.

According to BERNAMA News Agency, UOB Kay Hian Wealth Advisors’ head of investment research, Mohd Sedek Jantan, mentioned that the Federal Open Market Committee (FOMC) meeting scheduled for November 6-7 is expected to provide some stability amidst the election-induced market fluctuations. He noted that while the election results will likely influence US market sentiment, there is expected to be minimal direct impact on Malaysian markets. Local investors are reportedly adopting a cautious approach, closely monitoring Wall Street’s reactions and considering potential implications for US economic policy.

The market consensus currently anticipates a 25-basis-point rate cut, which would reduce the federal funds rate to a range of 4.50-4.75 per cent. This expectation is based on the easing of inflation tow
ards the US Federal Reserve’s 2.0 per cent target and a slight rise in the US unemployment rate, indicating a softening labour market.

Thong Pak Leng, vice-president of equity research at Rakuten Trade, predicts that the FBM KLCI’s recent drop below the key support level of 1,600 presents a favorable entry point for both short-term and long-term investors. He also foresees sustained interest in plantation stocks due to a rally in crude palm oil prices.

In the week just concluded, the spot month November 2024 contract and December 2024 decreased by 15.5 points to 1,605.0 and 1,608.0, respectively. Similarly, the March 2025 contract fell by 14.5 points to 1,596.5, while the newly introduced June 2025 contract settled at 1,595.0. Turnover surged to 243,353 lots from 64,552 lots the previous week, although open interest declined to 42,202 contracts from 74,284 contracts previously. On a weekly basis, the FBM KLCI dropped 14.32 points to 1,603.98, down from 1,618.30 the previous week.