What investors can expect from 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

Malaysian equities staged a firm comeback yesterday, in tandem with the positive trend among its regional peers to regain the 1,580 psychological level with banking stocks leading the recovery.

This came about following the release of some above expectation corporate results and the Federal Reserve’s reiteration of easy monetary policies.

At the same time, foreign funds turned net buyers for the day, breaking a seven-session selling streak, but overall volumes were lower.

With the technical indicators mildly oversold, yesterday’s bounce was welcomed as it allowed the key index to end its downward streak. However, it remains to be seen if there is sufficient followthrough support to extend the recovery.

As it is, the buying interest is still relatively mild and there is still some measure of cautiousness that may hamper the recovery prospects.

In addition, the weakness in key global indices overnight could also dampen the recovery process and prompt quick profit taking actions on some of yesterday’s big movers on Bursa Malaysia.

Therefore, we see market conditions becoming mixed-to-lower again, but we think any downside could be supported at the 1,565-1,570 levels. The hurdles, meanwhile, are at 1,590 and 1,600 points respectively.

Most of the lower liners and broader market shares also recovered yesterday, just a day after they endured a sharp retreat. We think conditions are still frothy as there is still substantive following from retail players on rotational and speculative elements.

As such, this is likely to see most of these stocks remaining elevated even as there could be mild bouts of profit taking ahead of the weekend.

Malacca Securities Research

While bargain hunting activities caused steel-related and technology stocks being traded higher following several strong sets of results under the respective sectors, the healthcare sector was the sole decliner in the broader market.

We believe the market will be pricing in COVID-19 vaccination progress and market may trend on an upward bias tone, focusing on recovery theme stocks.

On the commodity side, the crude palm oil price has climbed above RM3,700, while Brent oil price is firmly trading above US$65.

We reckon the aviation and tourism will still be favourable to trade, while defensive sector such as furniture and consumer products may be favoured by market players. We may watch out for plantation and energy sector given the firm crude palm oil and Brent oil prices recently.

Also, selected technology stocks are likely to rebound higher ahead of the release of reports.

The FBM KLCI bounced back to close marginally above 1,580. Technical indicators turned mixed as the MACD Histogram has turned green, while the RSI remained below 50.

We reckon the key index will trade sideways with an upside bias tone within 1,570-1,620 over the near term. – Feb 26, 2021

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