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 made a strong push last Friday to close at its highest level in six months amid a firmer buying interest in tandem with the upsides in many global equity indices.

On the key index, it was telecommunication stocks that provided the lift while the broader market saw most stocks gaining ground on the improved sentiments.

This resulted in the market breadth turning positive again on encouraging traded volumes of over 4.5 billion shares for the day.

The upsides on the FBM KLCI look to continue over the near-term amid the ongoing purple patch in global equities that should also permeate to stocks on Bursa Malaysia.

The improved sentiments are largely due to the reduced odds of a global recession for the rest of the year albeit the slower economic pace is expected to linger.

At the same time, the easing inflationary conditions are also adding optimism to the equity market performance.

With the FBM KLCI clearing the 1,462 hurdle last Friday and with investor confidence picking up, the upsides could look to sustain as it may now be targeting the next hurdles at the 1,470-1,473 levels even as we see some minor bouts of quick profit taking are expected at the start of the week that may slow the ascend.

Further ahead, the next hurdle is at the 1,480 level while the immediate support is the 1,462 level, followed by the 1,455 level.

Malacca Securities Research

The FBMKLCI managed to close firmer with the buying support within the telco heavyweights.

Given the Wall Street traded higher for the first day of September, it is likely that the buying interest may spill over towards stocks on the local front, especially the technology sector.

We believe the softer-than-expected jobs data last week suggested that the US Federal Reserve may hold on to the current interest rate environment and may provide upside potential towards the stock markets.

Meanwhile, we believe the overall local bourse may stay bullish with the launching of the National Energy Transition Roadmap (NETR) and New Industrial Master Plan (NIMP) 2030 over the past few weeks.

Commodities-wise, Brent crude experienced a breakout above US$87/barrel while crude palm oil (CPO) prices have surpassed RM4,000/metric tonne.

The FBM KLCI continues to trade on a firmer note, closing above the 1,460 level. The MACD Histogram has formed a rounding bottom formation while the RSI is hovering above 50.

Hence, we expect the FBM KLCI to surge and breakout above the resistance moving forward, targeting 1,470-1,480. Support is located around 1,450. – Sept 4, 2023

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