BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The key index remains on the downtrend yesterday but the losses were largely contained by mild support on some of the index heavyweights to cushion the weakness among telecommunication giants.
Conditions elsewhere, however, were more positive with many broader market shares and lower liners regaining traction on renewed buying interest, particularly among technology stocks that saw the technology index reaching a new high and helping market breadth to the positive side.
Although there are few signs of a rebound, we think that mild bargain hunting is emerging among index-linked stocks amid their oversold conditions.
This could lessen some of the downside pressure as the FBM KLCI also looks to find a near-term bottom.
However, we also think that buying could be mild for the time being as market players await the decision on the introduction of the capital gains and windfall taxes.
Therefore, the mostly cautious market conditions could prolong even as more economic sectors gear towards their full re-opening.
In the interim, selling may have ebbed and the key index could stage a rebound in tandem with the gains in overseas indices.
The near-term target is at the 1,535 level followed by 1,540 points. The supports, meanwhile, are at 1,524 and 1,520 points respectively.
Malacca Securities Research
The FBM KLCI ended the day mildly negative as investors mulled the possible imposition of capital tax rate and one-off higher tax rate with windfall profits.
On the broader market, shares linked to telecommunications network infrastructure soared on the JENDELA tender news which was said to be issued within four weeks.
We opine that the overnight gains on Wall Street, news on cross state travel to be allowed when the adult population vaccination rate reaches 90.0% coupled with the Government’s decision to move three more state to the next phase of National Recovery Plan (NRP) could lift investors’ sentiment.
The FBM KLCI back into the negative territory amid lacklustre trading. Technical indicators remained negative as the MACD Histogram has extended a red bar, while the RSI continued hovering below the 50 level.
Resistance is located at 1,550-1,560 while the support is pegged along 1,515. – Sept 23, 2021
