BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities endured another down day as market conditions remain frail after the World Bank trimmed the country’s 2021 GDP forecast due to the unabated COVID-19 situation.
The incessant selling, particularly on glove maker stocks, also resulted in the key index closing at its lowest level this year with the selling also widespread among in the broader market.
As a result, market breadth remains negative with losers significantly overwhelming gaining stocks.
With investor sentiments firmly tilted to the downside, we see the fragile market conditions sustaining to close out the week.
The continuing concerns over the pandemic conditions, coupled with increasing political uncertainties and the impact of the lockdown on the economy, will leave market players wary for longer that will add to the market’s near-term cautiousness.
Furthermore, there are also few signs of any market recovery for the time being and we expect the FBM KLCI to continue drifting lower.
As such, we think the key index may veer towards the psychological 1,550 level, but if it also falters, the next support is pegged at the 1,540 level. On the flipside, the hurdles are at the 1,562-1,565 levels, followed by the 1,571 points level.
Malacca Securities Research
The unabated COVID-19 spread in the country which may lead to further pressure on the economy, coupled with the concerns over the revised nation’s growth projection by World Bank have sent the FBM KLCI lower.
Following a heavy sell-down, we might anticipate bargain hunting activities to emerge on the local bourse.
On a side note, the Government has approved the licence and incentives for Risen Energy Co Ltd to manufacture solar cells and solar modules in Malaysia amounting to RM42.2 bil which would make Malaysia an integrated production hub for solar products.
The FBM KLCI has broken the immediate support level at 1,565. Technical indicators remained negative as the MACD Histogram extended another red bar, while the RSI hovered below the 50 level.
With the support level broken, investors might see bargain hunting activities emerging. The resistance is set at 1,580, while the next support level is set around 1,550.
