KUALA LUMPUR: Share prices on Bursa Malaysia are likely to see a rangebound trade next week with investors continuing to be cautious amid bearish market sentiments.

The adoption of the FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBM KLCI) effective Monday from the Kuala Lumpur Composite Index (KLCI) is also expected to keep trade rangebound.

FBM KLCI is made up of the 30 largest listed companies by market value, with at least a 15 percent free float.

Its constituents are prime market movers and represent about 60-70 percent of the main board's market capitalisation.

OSK Research Sdn Bhd, in its research note said most fund managers prefer to benchmark their fund against the FBM100 rather than the new FBM KLCI as the former more closely matched the old KLCI in terms of diversity.

16 of the current 17 sectors are represented in the FBM100 except timber.

"Given that most institutional investors will be benchmarking against the FBM100, we see the KLCI component stocks feeling far less impact come July 6.

"There should be less selling pressure on the 70 KLCI stocks that did not make it to the FBM KLCI as 45 of these companies will still be in the FBM 100," said the research house.

Among the biggest beneficiaries will be Genting, YTL Power and Parkson Holdings, which are in both the FBM KLCI and FBM 100.

The top six on the FBM KLCI will be Bumiputra-Commerce, Public Bank, Sime Darby, Maybank, Tenaga and IOI Corporation, all of which will see their weightage increase by two percentage points or more.

Meanwhile, a dealer said the KLCI will likely move between 1,040 and 1,090 next week.

He said despite the announcement of further liberalisation in the capital market on Tuesday, it will take a while for the market participants to react positively with the transition to the new index.

On Friday-to-Friday basis, the KLCI eased 3.08 points to close at 1,072.69 compared to last week's closing of 1,075.77. (Bernama)