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

There were more selling on Malaysian equities yesterday (Sept 28) that sent the FBM KLCI to its lowest level since May 2020 as well as staging a new low for 2022.

As it is, the weakening ringgit resulted in foreign institutions trimming their shareholding further with the broad-based selling also in tandem with a regional sell-off.

Consequently, losers were more than twice the number of gainers with lower liner also surrendering the gains attained a day earlier.

The incessant selling is keeping Malaysian equities entranced in the oversold zone as the earlier attempts at a rebound gave way.

Overall market conditions are likely to remain cautious due to the continuing weak market sentiments that is affected by the heightened recession odds as well as the unsettled geopolitical conflict in Eastern Europe that is likely to keep commodities and fuel in tight supply.

At the same time, the weaker ringgit could also prompt more foreign selling of Malaysian equities.

However, we also note that an adjustment from oversold is due given the overnight rebound on Wall Street may renew the hope for a recovery on Bursa Malaysia as well.

This could prompt the return of bargain hunting activities on some of the beaten down stocks and allow the key index to extricate from its year low with the immediate target set at 1,408-1,412 points, followed by the 1,420 level.

The supports, on the other hand, are at the psychological 1,400 points, followed by 1,395 points.

Malacca Securities Research

The FBM KLCI slid alongside with its regional peers as persistent negative sentiment prevailed to pull down the key index below its one-year low.

However, we believe the local bourse should see decent buying interest after a sharp rally on Wall Street overnight as the surprise policy pivot by the Bank of England (BOE) should lift regional sentiment.

Commodities-wise, Brent crude oil hovered above US$89/barrel, rebounding from its recent downtrend move as the market anticipated a rebound in consumer demand following a mild pullback in the greenback. Meanwhile, crude palm oil (CPO) price trended lower to hover around RM3,200/metric tonne.

The FBM KLCI crossed below its 52-week low at 1,410 after a five-day losing streak. Technical indicators remained negative as the MACD Histogram having extended a negative bar while the RSI is oversold.

We believe it could be due for a technical rebound with next resistance at 1,450-1,460 while the support is at 1,380-1,400. – Sept 29, 2022

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