BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The positive streak on Bursa Malaysia was sustained on Friday, allowing for the key index to fortify its position above the psychological 1,600 level.
The country’s better-than-expected 1Q 2024 gross domestic product (GDP) provided the fuel for the gains as the FBM KLCI headed to its highest level in more than two years.
Broader market shares also made firm headway, rising on the improved market confidence with gainers outpacing losers on a more than 2-to-1 margin. Market interest also surged past the 7 billion shares mark.
Near-term market conditions are likely to remain sanguine, bolstered by the country’s strengthening economic outlook as well as the continuing gains in key global indices that will help to preserve the upward streak for now.
As it is, investor confidence is picking up and this will continue to fuel the near-term gains as well as to cast aside the already toppish technical indicators, delaying the overdue market consolidation.
Conditions on Bursa Malaysia will also be buoyed by hopes for interest rate cuts in the coming months that will be supportive to the country’s export performance and currency performance.
With the key index still looking the tip-up further, the immediate target is now at the 1,620 level which is followed by the 1,623-1,626 levels. On the downside, supports are pegged at the 1,611 points and the 1,600 level respectively.
Malacca Securities Research
With Malaysia’s 1Q 2024 GDP data came in above expectations, the FBM KLCI, FBM70 and FBM Small Cap registered fresh 52-week highs.
Meanwhile, the US stock markets ended mixed but the Dow Jones charged above the 40,000 points level.
This week, we expect the market to be focusing on (i) speeches by US Federal Reserve officials; (ii) unemployment claims; and (iii) manufacturing and services PMI (Purchasing Managers’ Index) data to understand the overall interest rates direction going forward.
On the commodity markets, Brent crude noticed support above US$81/barrel by having traded along US$84/barrel while awaiting a decision from OPEC+ to continue its production cuts which will be ending in June. Meanwhile, gold price rallied near to its all-time-high zone by trading around US$2,420/oz.
The FBM KLCI index ended higher, surpassing the 1,615 level. However, the technical readings on the key index were mixed with the MACD Histogram extending a slight negative bar while the RSI maintains above 50.
The resistance is envisaged around 1,630-1,635 while the support is set at 1,595-1,600. – May 20, 2024
