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 maintained its stance above the 1,500 psychological level as it continues to mend from its steep pull-back two months ago.
However, the buying support was selective due to the still cautious market undertone that was rife with uncertainties over the Prime Minister’s position and the insipid economic environment.
The cautiousness was also reflected in the negative market breadth with many broader market shares ending in the red.
The growing political uncertainties, coupled with the unabating pandemic conditions, will continue to weigh on the near-term market sentiments.
As such, the cautious market environment is likely to prevail for longer with market players also adopting a wait-and-see attitude that could leave stocks to drift again.
Under the prevailing environment, the downside pressure could also intensify with market players trimming their short-term positions while fresh buying is likely to remain thin for the time being.
The uncertainties also mean that the 1,500 level is again under threat and if it gives way, the 1,490 level is the next support. On the flipside, the hurdles remain at 1,510 and 1,520 points respectively.
Malacca Securities Research
The FBM KLCI eked out marginal gains after recovering in the final trading hour, underpinned by the gains in plantation stocks.
Despite the 2Q 2021 gross domestic product (GDP) grew by 16% year-on-year (yoy), Bank Negara Malaysia (BNM) has revised the full-year GDP growth forecast lower to between 3%-4% (as compared to previous forecast of 6-7.5%).
However, investors are expected to have already digested the downward revision of the numbers.
While news that non-essential activities in manufacturing, construction, mining and quarrying sectors are allowed to resume operation starting from today may lift investors’ sentiment, the fluid political developments may limit the upside potential in the stock market over the near term.
The FBM KLCI booked marginal gains as the key index found support above the daily EMA9 level. Technical indicators remained mixed as the MACD Histogram has extended a green bar while the RSI continued hovering below the 50 level.
The key index may continue to trade sideways with next resistance envisaged at 1,520, while the support is set around 1,480. – Aug 16, 2021
