The FTSE Bursa Malaysia KLCI (FBM KLCI) will likely break the all-time high of 1,597 next week supported by local liquidity and strong first-quarter market performance in regional Asia Pacific markets.

The index touched the 1,597 record level on July 11 last year.

Dr Nazri Khan, vice president, head of retail research of Affin Investment Bank, said the FBM KLCI is also likely to get momentum from MSCI Asia Pacific and most Asian markets which finished the first quarter with a double-digit advance (Japan, Thailand, Taiwan).

"We note that MSCI Asia Pacific marked the best first quarter in 21 years despite concerns on China's economic resilience," he told Bernama.

The MSCI ASia Pacific index, according to Nazri, scored a first-quarter gain of 11.5 per cent, the best first-quarter performance since 1991.

Despite underperforming the region, the FBM KLCI's handsome first-quarter gains of 4.5 per cent, he said, should build more momentum in the near term.

The Malaysian market has four necessary ingredients to push the market higher, he said.

"The local market has ample liquidity on the sidelines, an accommodative Bank Negara, low interest rates and government commitment for economic projects," he noted, adding the local market will take further cues from a strong US market.

Interestingly enough, he said, despite negative external fundamentals, the FBM KLCI has charged from a support line of 1,310 since Sept 26, 2011 (an impressive gain of 21.5 per cent in six months).

"The six-month rally is considered the steepest bullish uptrend never seen since April 2009," he said, adding there is also a fairly reasonable speculative element in the small cap stocks to create some excitement near term.

"Though we agree that the local market is overbought and investors may pause after recent sharp gains, we have yet to see any evidence of distribution to suggest a serious market wind-down in the near term," he said.

During the week, share prices on Bursa saw volatile trading with sentiment cautious amid soft economic data from the US and pockets of weaknesses from the China market.

The market ended on a strong note for the week with the FBM KLCI rallying to close at 1,596.33, near its all-time high of 1,597, reflecting the best quarter performance in Asian markets as investors hope that a meeting in Copenhagen on Friday and Saturday among European Union ministers will address the eurozone debt issues.

On a Friday-to-Friday basis, the benchmark FTSE Bursa Malaysia KLCI advanced 10.50 points to 1,596.33 from 1,585.83 last Friday.

The Finance Index increased 137.53 points to 14,321.65 from 14,184.12 last Friday.

The Industrial Index went up 18.82 points to 2,883.96 from 2,865.14 last Friday.

The Plantation Index increased 40.96 points to 8,741.42 from 8,700.46 last Friday.

The FBM Emas Index rose 37.19 points to 10,939.63 from 10,902.44 last Friday.

The FBM Ace Index declined 121.54 points to 4,583.84 from 4,705.38 last Friday.

The FBM Mid 70 Index declined 44.19 points to 12,026.04 from 12,070.23 last Friday.

Total weekly volume decreased to 7.746 billion shares worth RM7.784 billion from 12.395 billion units worth RM8.044 billion last week.

The main market turnover decreaased to 4.131 billion shares worth RM7.281 billion from 6.337 billion shares worth RM7.25 billion last week.

Volume on the ACE market decreased to 3.056 billion valued at RM463.499 million from 5.519 billion units valued at RM728.187 million last week.

Warrants declined to 289.246 million shares worth RM31.108 million from 382.556 million shares worth RM43.021 million last week. -- Bernama