BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities rebounded on Monday, buoyed by bouts of bargain hunting after last week’s pullback on optimism that more economic activities, particularly service type industries, will be allowed to resume following the rise in the inoculation rate.
The optimism was also prevalent among the lower liners and broader market shares as their gains were also sustained from last week’s upticks. This also helped market breadth to remain positive for the day.
With more relaxed measures for the economy, coupled with the positivity in overseas equities, we see further near-term upsides that could allow for the key index to reclaim the 1,500 level, albeit the overall market undertone is still one of cautiousness due to the unabating domestic COVID-19 infections and still insipid economic environment.
We see much of the gains emanating from the sustained bargain hunting on some of the beaten down stocks that were sold down in the most recent pullback.
Although we think the 1,500 level is the immediate target, we still think that further gains will be difficult to attain for now as market participation will continue to lag due to the lack of positive leads.
Therefore, we see the 1,507-1,510 levels serving as the big hurdles for now, followed by the 1,520 level. Meanwhile, the 1,490 level will be the immediate support, followed by the 1,486 level.
Malacca Securities Research
The FBM KLCI and broader market turned higher on Monday mainly boosted by gains in consumer-related and transportation & logistics sectors after the announcement on standard operating procedure (SOP) relaxation for fully vaccinated individuals as well as better than expected Malaysia’s Industrial Production Index (IPI) which rose 1.4% year-on-year in June.
Despite an upward trending mode on Wall Street, the current COVID-19 and political developments in Malaysia may continue to suppress buying interest on the local bourse.
Meanwhile, crude palm oil (CPO) price eased as investors stayed on sidelines while awaiting for the August export data from the Malaysian Palm Oil Board (MPOB) today, while crude oil price climbed to close above US$70/barrel.
The FBM KLCI booked marginal gains prior to the public holiday with lower trading volume. Technical indicators turned mixed as the MACD Histogram has turned into a green bar, while the RSI hovered below the 50 level.
The key index may continue to trade in a consolidation mode with resistance envisaged around 1,500-1,520, and the support level located at 1,450-1,480. – Aug 11, 2021
