BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
There were further profit taking on the FBM KLCI yesterday as it bucked the region’s mostly uptrend to end the day below the psychological 1,550 level.
There were fewer fresh catalysts with many index-linked stocks left to drift. The broader market, however, was more positive as there were still bouts of buying interest that allowed the FBM Small Cap and FBM ACE Market indices to end on upbeat mode.
Traded volumes, however, slipped below 3 billion shares with gaining stocks just pipped losing ones.
The recovery among the key index stocks appears to have stalled amid the lack of new leads to sustain the gains, particularly after it failed to re-test the 1,600 level and stocks were left to consolidate again.
At the same time, the key index is on a mild retreat as its technical indicators touched the overbought level following the 13% rebound from the tariff induced low of 1,400 points.
With fewer compelling buying opportunities, there could be further profit taking ahead amid the already largely fair market valuations.
Nevertheless, there could still be pockets of interest amid the on-going results reporting season that may provide some buying support, particularly on stocks what reports above expectation results, hence keeping the key index near the psychological 1,550 level.
On the downside, there are supports at the 1,540-1,543 level, followed by the 1,536 level. Above 1,550 points, the other resistances are at 1,556 points and 1,561 points respectively.
Malacca Securities Research
Tracking Wall Street’s performance, the local sentiment may soften but we believe investors could shift their appetite towards domestically-driven sectors and companies with stable job pipelines.
Gamuda Bhd’s recent land acquisition could have spillover effect on its long-term construction partner, Inta Bina Group Bhd.
Elsewhere, Eversendai Corp Bhd’s contract wins of RM1.3 bil may boost its outstanding order book to RM6.6 bil which may translate to solid earnings visibility over the next three to four years, thus further supporting its share price.
With Reach Ten Holdings Bhd ’s earnings coming in line with our estimates, the company remains undervalued due to its stable margins and recurring income.
The key index closed lower yesterday but continued to trade above the MA (moving average) lines with technical indicators showing positive signals. The MACD histogram expanded positively while the RSI hooked above 50.
Resistance is anticipated around 1,563-1,568 while support is located at 1,528-1,533. – May 21, 2025
