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

The FBM KLCI ended marginally lower on Friday as it was again able to recoup most of its intraday losses.

Market conditions were still largely insipid, affected by Malaysia’s lower-than-expected economic performance in 2Q 2023 and concerns over China’s slowing economy.

Most Bursa Malaysia sector indices also closed lower in tandem with the key index’s pullback with market breadth remaining on the negative side. Traded volumes also fell by some 26% on Friday.

Market conditions are likely to stay listless as fresh impetuses have largely dissipated after the FBM KLCI mounted a decent recovery from the start of 2Q 2023.

As a result, the FBM KLCI is likely to continue drifting at the start of the week with most market players set to stay on the sidelines, awaiting for more impetuses to emerge.

As it is, concerns over the country’s economic undertone for the rest of the year have re-emerged following the release of the below expectation 2Q 2023 GDP (gross domestic product) performance.

This could keep market players cautious for the time being as they digest the weaker economic performance.

Leads from overseas sources could also be far and in-between as many of the global indices are also dithering. For now, the key index could linger within the 1,440-1,443 levels with the 1,437 level the next key support. The resistances, meanwhile, remain at the psychological 1,450 level and at 1,455 points respectively.

Malacca Securities Research

The local bourse was not spared by the sell-down in regional markets as volatility remains unabated.

The selling pressure was also compounded with the weaker-than-expected 2Q 2023 GDP growth at 2.9% year-on-year (yoy) vs Bloomberg consensus expectations of an expansion of 3.6% yoy.

Looking ahead, we expect the weakness of external demand (slowing exports) to continue weighing onto growth.

Meanwhile, the lower liners may undergo a consolidation spell with key focus shifting towards a barrage of corporate earnings releases.

Still, any further pullback may also attract quick bargain hunting, in our view. Commodities-wise, Brent crude steadied above US$84/barrel while crude palm oil (CPO) prices hovered above RM3,800/metric tonne.

The FBM KLCI ended another session lower as the key index formed a bearish candle. Still, the key index remained supported above the daily SMA200 level.

Technical indicators stayed mixed as the MACD Histogram formed a negative bar while the RSI is treading above 50. The immediate resistances are located along 1,480-1,500 while the support is pegged around 1,420-1,440. – Aug 21, 2023

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