BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Malacca Securities Research
The FBM KLCI notched gains for a second consecutive session amid buying interest following the announcement of the relaxation of SOPs for fully vaccinated citizens.
While the recovery-theme stocks continued to garner investors’ interest, the market sentiment may still be affected by the ongoing COVID-19 cases and political developments in Malaysia.
Meanwhile, the Malaysian Rubber Council’s (MRC) projected a double-digit growth in 2021 on rubber gloves demand in volume.
Commodities-wise, the crude palm oil (CPO) price jumped above RM4,500 after end-July palm oil stocks slumped due to delayed harvesting amid labour shortages.
On a side note, foreign investors have turned into net buyers after 12 session of net selling.
The FBM KLCI climbed above the critical 1,500 level after hovering in the positive territory for the session, closing above the daily EMA 9 level.
Technical indicators remained mixed as the MACD Histogram has extended a green bar, while the RSI hovered below the 50 level.
Should the key index hold above the 1,500 level, the next resistance is envisaged at 1,520, while the support is set around 1,480-1,500.
Hong Leong Investment Bank Research
Although recent announcements of a gradual reopening and relaxation for fully vaccinated individuals signal an inflection point towards economic recovery, we opine that the market would remain choppy (short-term stiff resistances situated at 1,510-1,534 territory).
This comes amid prevailing speed bumps, notably local political stalemate, elevated daily COVID-19 cases and the upcoming August reporting season.
Having said that, a recovery scenario remains encouraging (key downside supports: 1,452-1,474) given the aggressive vaccination rate (fully vaccinated) to achieve the targeted 40% and 70% goals by end of August and September as well as the Government’s optimism that most states will move into Phase 4 of the National Recovery Plan (NRP) by November. – Aug 12, 2021
