KUALA LUMPUR: The FTSE Bursa Malaysia KLCI (FBM KLCI) is expected to hold steady within a narrow band of 1,655 to 1,665 as investors digest the national Budget 2025 announcement by Prime Minister Datuk Seri Anwar Ibrahim on Friday (Oct 18).

UOB Kay Hian Wealth Advisors head of Investment Research Mohd Sedek Jantan said the key measures included support for homeownership, with provisions for 57,000 first-time homebuyers under the Syarikat Jaminan Kredit Perumahan (SJKP) scheme and tax relief of up to RM7,000 for three consecutive years for first-time buyers.

"These incentives are anticipated to benefit the property and construction sectors, along with their supply chains," he told Bernama.

Although specifics were not fully disclosed, he said the technology sector is also expected to gain from the budget announcement, as the government introduces new incentives focused on high-value activities such as integrated circuit design and advanced materials.

These measures are likely to provide positive momentum for the technology sector.

"We also expect foreign investors to continue participating in the capital market as the government remains committed to reducing the fiscal deficit to 4.3 per cent this year and 3.8 per cent next year.

"This aligns with the targets of the Public Finance and Financial Responsibility Act, which aims for a fiscal deficit of 3.0 per cent and government debt below 60 per cent of gross domestic product (GDP)," said Mohd Sedek. 

He further said as fiscal discipline reduces risks associated with sovereign debt, it lowers borrowing costs and strengthens the banking system.

Consequently, the financial sector is expected to benefit from this improved fiscal environment, creating a more stable landscape for financial institutions.

On the economic data front, the advance GDP estimate for the third quarter of this year is scheduled to be released by the Department of Statistics on Monday, which should bolster investor confidence in the Malaysian economy.

"In conjunction with this, the prime minister has revised this year's GDP forecast from a range of 4.0 per cent to 5.0 per cent to 4.8 per cent to 5.3 per cent," said Mohd Sedek. 

Regionally, the week ahead appears to be quiet for China in terms of data releases. The loan prime rate will be announced on Monday, but no surprises are expected, with a 20 basis point cut anticipated to align with the reduction in the seven-day reverse repo rate made in September.

However, Tokyo's inflation data may be a key focus as it could significantly influence the timing of the Bank of Japan's next monetary policy move.

The local bourse traded mostly higher during the week just ended, tracking Wall Street, regional market performances, and the 2025 Budget announcement. 

On a Friday-to-Friday basis, the FBM KLCI advanced 12.44 points to 1,645.99 from 1,633.55 in the previous week.

Across Bursa Malaysia's index board, the FBM Emas Index added 84.78 points to 12,367.57, the FBM Emas Shariah Index rose 66.60 points to 12,276.95, the FBMT 100 Index garnered 88.72 points to 12,067.57, the FBM 70 Index jumped 121.24 points to 17,717.63, but the FBM ACE Index declined 27.97 points to 5,120.80.

Sector-wise, the Industrial Products and Services Index edged up by 0.35 of-a-point to 176.42, the Energy Index was 27.57 points lower at 854.53, the Financial Services Index advanced 290.28 points to 19,468.56, while the Plantation Index gained 72.12 points to 7,273.53.

Turnover fell to 13.10 billion units worth RM12.87 billion versus 14.17 billion units valued at RM12.87 billion in the previous week.

The Main Market's volume decreased to 6.88 billion shares valued at RM11.67 billion from 8.01 billion shares worth RM11.67 billion last week.

Warrants turnover expanded to 4.08 billion units worth RM660.53 million against 3.88 billion units worth RM529.21 million before.

The ACE Market's volume eased to 2.12 billion shares valued at RM617.58 million compared with 2.27 billion shares worth RM656.80 million previously.