BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian stocks continue to lose ground yesterday with the pullback sending the key index to just above the 1,500 level at the close.
The FBM KLCI’s decline was in line with the losses among regional peers on fears of an escalating Israel-Iran conflict.
At the same time, the US Federal Reserve’s hawkish comments on the US economy further dampened sentiments.
In the broader market, the lower liners also retreated with total losers more than twice the number of gainers as traded volumes rose to 2.8 billion shares.
With the threat of an escalating conflict in the Middle East, market conditions are likely to stay cautious heading into the last trading day of the week, leaving the 1,500 level under threat again amid further flights to safety.
Already, investor sentiments are frayed by the escalating conflict in the Middle East over the past few days with further weaknesses in store as more investors continue to pivot from riskier assets.
However, we also see the FBM KLCI attempting to stay above the 1,500 level as it is a psychological support level with mild buying support possibly emerging, particularly from local institutions that could cushion some of the continuing foreign selling.
If the key index slips below the 1,500 level, the ensuing supports are pegged at 1,492-1,495 points, followed by the 1,486 level.
Malacca Securities Research
Entering the last trading day of the week amid the ongoing Iran-Israel war, we expect the local bourse to remain lacklustre.
The rise in Brent oil prices and the US dollar index reflects a risk-off environment.
We believe REITs which is viewed as a defensive sector will continue to perform, supported by the healthy sector’s average dividend of more than 5%.
Meanwhile, we reiterate our positive stance on the utility, construction and renewable energy sectors.
This follows Tenaga Nasional Bhd’s grid upgrades to support rising data centre demand and the nation’s renewable energy shift under the National Energy Transition Roadmap (NETR) masterplan.
Thus, we favour counters like Inta Bina Group Bhd, MN Holdings Bhd, Southern Cable Group Bhd and Solarvest Holdings Bhd.
The key index formed a bearish candle and continued to trade below the MA (moving average) lines with technical indicators showing signs of weakening; the MACD histogram has turned negative while the RSI has broken below 40.
Resistance is anticipated around 1,516-1,521 while support is located at 1,481-1,486. – June 20, 2025
