Below are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
As we have noted, the Malaysian equity market is overbought and is already at its year-end levels, which we think is overdone given that corporate earnings recovery is still iffy at best amid the fresh bout of selective lockdowns and slower recovery process.
This has also left valuations exceeding its fair values vis-à-vis the earnings on offer. As such, we maintain our view that a consolidation is already due, even though there are few signs of a pullback as yet.
While we do not discount the possibility of further near-term upsides on rotational plays, we think the gains could also prompt fresh profit taking actions due to the already toppish conditions.
The resistances are at the 1,621 and 1,628 levels respectively, with the supports are pegged at the psychological 1,600 points level, followed by the 1,587 level.
JF Apex Securities Research
US markets declined overnight as investors took profit from record high levels amid retail sales rising less than expected. Similarly, European stocks dropped as the vaccine-fuelled rally took a breather.
On the local market, the FBM KLCI gained 10.49 points to 1,610.1 (yesterday). Following the negative performance in Wall Street, the FBM KLCI could hover sideways below its resistance of 1,615 points.
Among stocks to watch are PetDag, FGV and MISC after their quarterly results; K-One Technology secures RM30 mil AWS cloud services contract; AirAsia Group’s 33%-owned associate AirAsia Japan Co Ltd has filed for bankruptcy; Batu Kawan is acquiring a 56.32% stake in Chemical Company of Malaysia from PNB for RM292.97 mil; Unisem is to have a private placement of 72.71 mil shares to raise up to RM399.9 mil to fund expansion plans in Malaysia and China; Tenaga Nasional has sued Iskandar Waterfront City for RM76.56 mil for damage to its undersea cables; and AT Systemization is raising RM99.31 mil through another private placement which will involve it issuing up to 750.04 million shares or 20% of its total issue price.
