BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The FBM KLCI was still on the ascend yesterday with the dominant foreign buying sending the key index comfortably pass the 1,580 level.
The rotational buying has permeated to laggards in the plantation and industrial stocks but conditions in the lower liners and broader markets were mixed as retail following was still tepid that also saw profit taking continuing.
As a result, gaining stocks were just ahead of losing ones for the day.
Although we see the recent gains as overdone, the sustained buying from foreign funds continued to fuel the rally and reversing some of their year-to-date net selling.
We deem the fresh buying spree was largely due to Malaysian equities being under-owned by foreign funds which then took advantage of the calmer political environment to bargain hunt for some of the sector leaders.
However, with market conditions already toppish and the pandemic conditions still showing few signs of easing, we think that the ascend will slow with a pullback also on the cards.
Therefore, we think the FBM KLCI could make little headway to end the week with the supports now at the 1,580 level followed by the 1,570 level.
The hurdles, meanwhile, are at 1,590 and the 1,600 points respectively.
Malacca Securities Research
The FBM KLCI continued its winning run yesterday as the key index outperformed most of its regional peers following the return of foreign funds which saw a net buying value of RM310.8 mil.
Also, investors will be waiting for the Cabinet line-up that will be released today which is likely to boost investors’ confidence further.
On the global front, investors are taking a breath while waiting for the outcome of the Jackson Hole symposium which may provide signals on the US Fed’s monetary policy.
Meanwhile, the rising geopolitical tension surrounding the developments in Afghanistan could be concerning the markets at this point of time.
Commodities-wise, Brent oil retreated while crude palm oil (CPO) price rose.
The FBM KLCI marked a fifth session gain yesterday as the key index continued hovering above SMA100 level. Technical indicators remained positive as the MACD Histogram has extended a green bar while the RSI is hovering above the 70 (overbought) level.
With the key index crossing above the resistance level at 1,580, next resistance is envisaged around 1,600 while the support level is at 1,540. – Aug 27, 2021
