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

Rotational interest dominated trades on the FBM KLCI with buying interest switching to telco and plantation stocks which provided the key index with a big push to offset most recent market falls.

The extended gains also allowed the key index to buck the region’s mostly lower closing trend albeit the FBM KLCI rose in tandem with the higher ASEAN indices.

Market breadth remained positive as many lower liners and broader market shares also rose with the overall market volume improving further.

While the sustained rebound is welcomed, we think the recent upsides are already overdone, hence there could be a pullback ahead of the long weekend.

Profit taking activities could emerge as the FBM KLCI is already near our near-term target of around the 1,440-1,450 levels and there remains no change to the market’s fundamentals.

Therefore, further upsides may become more difficult to attain as valuations are also catching up to its historical averages after the recent gains.

As such, the near-term market conditions could turn more tentative as the recent gains are digested. This may see the key index retreating back to around the 1,430 level for the time being.

Further below, there is support at the 1,425 level. On the other hand, the hurdles are at 1,440 and the 1,450 levels respectively.

Malacca Securities Research

The FBM KLCI closed at intraday high spurred by persisted buying momentum in Petronas Chemicals Group Bhd and selected banking heavyweight after the announcement on the 15th General Elections (GE15) polling date.

Nevertheless, we opine that the local bourse may trade sideways amid prevailing global and local headwinds such as the political turmoil in the UK following the Prime Minister’s resignation and the still-hawkish Federal Reserve tone on the US interest rate direction.

Meanwhile, investors are waiting for the outcome of the GE15. Commodities-wise, Brent crude sustained above US$92/barrel while crude palm oil (CPO) price hovered above RM4,000/metric tonne.

The FBM KLCI surpassed its immediate resistance at 1,420 and sustained well above its daily EMA20 level. Technical indicators turned positive as the MACD Histogram extended a positive bar while the RSI hovered above 50.

Next resistance is set along 1,465-1,485 while the support is monitored at 1,400-1,420. – Oct 21, 2022

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