FBM KLCI Futures Close Higher

FKLI Spot Closed With Slight Premium Over Underlying

The FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) futures contracts on Bursa Malaysia Derivatives closed higher today despite the easier cash market, dealers said.

The market reacted to Bank Negara Malaysia's decision to raise the overnight policy rate (OPR) which was within market expectations, they said.

At the Monetary Policy Committee meeting today, the central bank decided to raise the OPR to 2.25 per cent.

Affin Investment Bank's economist Alan Tan said stronger economic growth in the fourth quarter last year provided room for Bank Negara to normalise interest rates.

Tan said Malaysia's key interest rate at 2.0 per cent was a record low and this enabled Bank Negara to normalise interest rates gradually at higher levels.

At close, the March 2010 contract rose 1.5 points to 1,285, April 2010 increased 1.5 points to 1,282.5, June 2010 added 0.5 of a point to 1,279 and September 2010 gained one point to 1,278.

Turnover was higher at 4,794 lots compared to 4,568 lots yesterday while open interest rose to 16,861 contracts from 16,553 contracts previously.

The underlying FBM KLCI closed 2.01 points lower at 1,284.09 Thursday.