By Christine Lim

KUALA LUMPUR, Aug 18 (Bernama) -- The FBM KLCI will likely be firmer next week based on better market sentiment in regional markets, dealers said.

Affin Bank Vice-President and Head of Retail Research Dr Nazri Khan said the FBM KLCI's underlying trend would remain firm in the near-term with the next target of 1,660 points, to be largely driven by large-capitalised and quality defensive stocks.

He said equity markets in Japan, Shanghai and United States have improved the last three months on the back of improving US economic data.

"The FBM KLCI's underlying trend remains upbeat ahead of Budget 2013 and positive corporate results, as well as, the better-than-expected growth in Malaysia's second quarter gross domestic product," he told Bernama.

Dr Nazri said the government's fiscal initiatives also provided support to the economy.

"Malaysia's bourse remained the most defensive exchange with one of the highest dividend in the world. This attracted fund managers into the Malaysian bourse," Dr Nazri said, adding that property, finance and consumer stocks would lead the market forward.

During the week, the FBM KLCI surged to an all-time-high over and above the 1,650-level, in tandem with gains in regional markets bolstered by expectations of stimulus measures by policy makers in major economies.

On Friday, the FBM KLCI slipped below 1,650 points on profit taking activities as investors locked in their profits ahead of the Hari Raya holidays.

The market will be closed on Monday and Tuesday for the festive celebration.

On a Friday-to-Friday basis, the benchmark FBM KLCI rose 4.43 points to 1,649.79 from 1,645.36 last Friday.