What to expect on Bursa Malaysia this Friday

BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:

Inter-Pacific Research

There were more downside on Bursa Malaysia as the attempts to mount a rebound fizzled out with the sustained selling sending the FBM KLCI to yet another new year low after it broke the psychological 1,400 points level.

Glove maker stocks were the main losers but plantation stocks regained some traction as crude palm oil (CPO) prices rose.

Even as conditions in the broader market were mixed, selling pressure still dominated trading with losers again surpassed gaining stocks.

Amid the feeble attempts at shoring up the key index from its oversold condition, the market’s headwind could still dominate sentiments and leave the key index on the downtrend for longer.

This is particularly so after the key index failed to hold on to the psychological 1,400 level, resulting in market sentiments becoming increasingly shaky.

At the same time, global equities are still pulling back, and this could also hasten the flight to safety with Malaysian equities no exception.

Therefore, the insipid market conditions are set to dominate trades into the last trading day of the week with the supports now pegged at 1,390 and 1,376 points respectively. The 1,400 level is now the immediate hurdle, followed by the 1,407 level.

Malacca Securities Research

The FBM KLCI declined below the key 1,400 level as increasing concerns over global recession permeated the local bourse.

As Wall Street wiped out its gains from the previous session, we reckon that the local sentiment may remain fragile as investors will adopt a wait-and-see approach amid the rising macroeconomic pressure.

Nevertheless, we expect mild buying support on index heavyweights for 3Q window dressing activities with the key index being supported above 1,400.

Commodities-wise, Brent crude is traded around the US$88/barrel mark as the market anticipated an output cut by OPEC+, while CPO hovered above the RM3,300/metric tonne level.

The FBM KLCI fell below the 1,400 psychological level, logging its seventh straight daily decline. Technical indicators remained negative as the MACD Histogram extended a negative bar while the RSI continues to stay oversold.

The next support is located at 1,360-1,375 while resistance is pegged along 1,430-1,450. – Sept 30, 2022

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