BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The key index continues to lose ground ahead of the unveiling of Budget 2022 with most market players remaining on the sidelines to await direction from the Budget.
The announcement of a one-off windfall tax and higher stamp duties on equity transaction, however, saw the key index ended the day lower, albeit many lower liners and the broader market regained some traction to end the week on a positive note.
Meanwhile, market interest remained thin with traded volumes slipping by a quarter to just over 3.0 billion shares for the day.
The imposition of the one-off windfall tax on companies could see the market continuing its tentative mode as market players assess the impact of the higher tax rate on 2022’s earnings performance and this could prolong the insipid market conditions.
Already, market sentiments have turned weaker of late as it continues to consolidate from last month’s gains with this trend set to continue for the time being, temporarily casting aside the positives from the economic re-opening.
With the subdued market outlook to continue, the lingering downside bias could also see the key index slipping below the 1,560 level and potentially leading to the key index to retest the 1,550 level which for now is likely to serve as a strong support.
On the other hand, hurdles are pegged at 1,572 and 1580 points respectively.
Malacca Securities Research
The FBM KLCI declined significantly amid continued selling activities prior to the tabling of Budget 2022 on Friday.
Although Budget 2022 is viewed as expansionary, we expect the surprise of the one-off “Cukai Makmur” and contract notes stamp duty changes for listed share trading may offset the goodies from the Budget 2022 – at least for the near term.
This might lead to knee-jerk reaction selling pressure on FBM KLCI and broader market today.
Nevertheless, we expect the bargain hunting activities to emerge once the market players look beyond the one-off tax and focuses on the economic recovery tone going forward.
Commodities-wise, crude palm oil (CPO) price rebounded above the RM5,000 level while crude oil price was mildly higher.
The FBM KLCI closed around the EMA60 level after fluctuating between the positive and negative territories, marking its seventh session of losses.
Technical indicators remained negative as the MACD Histogram stayed below zero while the RSI continued hovering below the 50 level. The next resistance is located at 1,580 while the support is pegged along 1,515-1,530. – Nov 1, 2021
