What to expect on Bursa Malaysia this Monday

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

Inter-Pacific Research

Malaysian equities ended the week in another sombre mood, losing further ground as fresh buying interest continued to thin due to the ongoing market headwinds and in tandem with the weakness among regional indices.

It also saw the key index shedding 3.4% in 3Q 2022 as well as ending at its year low.

Conditions in the broader market were also insipid as losers continue to outpace gainers with utility stocks the worst performer of the day albeit construction stocks emerged as the main gainer.

The start of the final quarter of the year is unlikely to provide much solace with the dour market outlook to prolong with no change to the ongoing challenges that the global economy and equity markets are facing.

At the same time, there will also be some measure of cautiousness ahead of the unveiling of the country’s 2023 budget with market players to look for cues from the announcement at the end of the week for direction.

Amid the continuing hesitation, the FBM KLCI is likely to drift further with little fresh buying impetus even as the key index is already deeply oversold.

On the downside, the FBM KLCI may look head towards its next support at the 1,390 level with the ensuing support pegged at 1,385 points. The 1,397-1,400 levels are the immediate hurdle, followed by the 1,406 points.

Malacca Securities Research

The FBM KLCI wrapped up 3Q 2022 with a downbeat note as prolonged bearish cues from the global markets coupled with continuous selling from foreign investors dragged the key index lower.

We believe global market turmoil will likely continue, stemming from fear over potential recession in view of the elevated inflation rate.

However, we expect mild bargain hunting activities to emerge ahead of the Budget 2023 this week.

Commodities-wise, Brent crude price fell to around US$85/barrel while crude palm oil (CPO) gained momentum to close above RM3,410/metric tonne, tracking soybean oil gains.

The FBM KLCI marked its eighth session of losses last Friday as buying interest failed to lift the key index beyond 1,400.

Technical indicators remained negative as the MACD Histogram extended a negative bar while the RSI is still trending below 30. The resistance is pegged along 1,410-1,430 while support is set at 1,365-1,380. – Oct 3, 2022

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