BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Malacca Securities Research
Final hour bargain hunting activities sent the FBM KLCI to close higher for the second session as the key index booked marginal gains while investors await for more clarity on the political front.
Despite the overnight negative Wall Street performance, we believe investors will be monitoring news flow regarding appointment of the new Prime Minister and formation of the government to decide on their investment exposure.
Besides, traders might be brushing off the political developments and focusing on recovery theme sectors in view of the further easing of business standard operating procedures (SOPs) in the National Recovery Plan (NRP) Phase 2 states.
Commodities-wise, both crude palm oil (CPO) and crude oil prices declined.
The FBM KLCI extended its rally as the key index continued to hover above the daily EMA9 and EMA20 level.
Technical indicators remained positive as the MACD Histogram has extended a green bar, while the RSI hovered above the 50 level. Next resistance is set at 1,540 while next support level is located around 1,500.
Hong Leong Investment Bank Research
The FBM KLCI may consolidate its recent gains after rallying from 1,483 points (Aug 4 low) to 1,525 yesterday, pending a new Prime Minister announcement (likely by this week).
We reiterate our view of limited downside to the already-depressed benchmark index (trading at circa 13.5 times 2021 price-to-earnings ratio vs 10-year average 17 times).
This is amid low foreign ownership (a historic low of 20.2% as of July) and expectations of a more meaningful recovery in 4Q 2021 when Malaysia crosses the vaccination herd immunity (expected to achieve the 80% threshold of the adult population being fully vaccinated by October).
Short term supports are situated at 1,483-1,500 while resistances are pegged at 1,534-1,556 levels. – Aug 19, 2021
