What to expect on Bursa Malaysia this Thursday

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

Inter-Pacific Research

It was yet another up day on Bursa Malaysia as it closed-in on the psychological 1,600 points level in a continuation of rational buying.

There were renewed interest in construction and banking stocks with improved sentiments also resulting in most stocks ending the day on a positive note.

Foreign institutions were again active and extending their net buying position but traded volumes eased further as recent price surges have left stock prices on the toppish side.

After its streak of recent gains, the FBM KLCI is nearing an overbought position which means that a breather is already due. As it is, stock valuations have caught up and is well within its historical forward averages, thus leaving little room for them to climb significantly higher.

This also means that there are fewer compelling buying opportunities with share prices already reflective on their near-to-mid-term fundamentals.

A consolidation is deemed beneficial as it would also allow the recent gains to be digested, but we think there will still be ample support to keep stock prices elevated for the time being, buoyed by easing pandemic conditions that are widely expected to drive demand.

Therefore, any pullback is likely to be mild and should be well supported at the 1,580-1,590 levels with bouts of rotational interest helping to shore up the market. On the other hand, the hurdles are at 1,608 and 1,620 points respectively.

Malacca Securities Research

The FBM KLCI closed above the 1,600 psychological level amid persistent buying from foreign funds over the past week with sentiment remaining positive on the back of discussion on international borders re-opening going forward.

The recovery theme sectors such as construction, building material and financial services sectors saw substantial gains and may remain under the limelight in the near term ahead of Budget 2022.

Meanwhile, plantation counters are gaining traction amid a jump in crude palm oil (CPO) price which has rebounded and surged by 3.4% to close above the RM5,000 level.

The FBM KLCI crossed above the 1,600 psychological level amid a seven-day winning streak. Technical indicators remained positive as the MACD Histogram has extended a green bar but the RSI is slightly overbought.

The next resistance is pegged at 1,620-1,640 while support is pegged along 1,580. – Oct 14, 2021

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