What to expect on Bursa Malaysia today

BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:

Inter-Pacific Research

Despite being quick off the blocks at the start of the day, Malaysian equities gave up most of their gains yesterday as follow through buying stayed tepid, cumulating in the key index ending near its intraday low.

Much of the indifferent trend was due to the weakness in regional indices that extended to the local bourse with glove makers losing ground to nullify gains among banking stocks.

The broader market was also insipid with profit taking activities still prevalent, resulting in the market breadth turning negative again.

We see the key index remaining range-bound as widespread buying interest is still absence, hindered by the lack of new leads despite the easing COVID-19 conditions.

As it is, there are fewer compelling buying opportunities as most stocks have largely reflected their potential earnings recovery for 2021 even as the earnings prospects of many stocks have weakened since 1Q 2020 due to the ongoing lockdown conditions.

This is tempering the optimism from the recently concluded results that have generally yielded within-to-slightly better-than-expected results.

As such, we think the key index could continue to linger within a tight band for the time being as it looks to consolidate further due amid the lack of sustainable buying impetuses.

Therefore, we see the FBM KLCI trending within the 1,560 and 1,580 levels for now with the other significant support and resistance pegged at 1,550 points and the psychological 1,600 level respectively.

Malacca Securities Research

Bucking the downturn across the regional markets, the FBM KLCI ended modestly higher as continued selling in glove heavyweights were offset by buying support in IHH Healthcare Bhd and selected banking heavyweights.

We believe the local bourse should trade in an upward bias tone following the change of movement control order (MCO) status for Selangor, Johor, Penang and Kuala Lumpur.

Meanwhile, the number of COVID-19 confirmed cases daily has dropped to year-to-date low. However, note that the negative sentiment on Wall Street overnight could cap the upside potential on the local front.

The FBM KLCI declined for the third session with the technical indicators still slightly negative; the MACD Line is still below zero, while the RSI remained below 50.

Given the technical reading remained on the negative side, we expect the key index to further trade range-bound between support and resistance of 1,550-1,620, respectively. – March 3, 2021

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