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

The FBM KLCI posted further gains yesterday as it also bucked the region’s mostly weaker trend to push past the 1,390 level in what is seen as continuing mid-year window dressing.

This time, the gains were mostly contributed by banking and energy stocks that were among the day’s top gainers.

The broader market, however, was mixed-to-lower but gainers managed to pip losers to allow market breadth to turn positive. Traded volumes also rose past 3 billion units amid the window dressing activities.

While the recent gains are encouraging to break the FBM KLCI’s weakness spell, the upsides are deemed to be feeble as it is selective and on relatively limited interest.

As such, its longevity remains doubtful as the buying interest is relatively benign and may just be due to window dressing activities. As it is, foreign funds are still net sellers with few signs of their selling abating.

While there could still be further window dressing over the near term due to the buying support from local institutions, the market’s undertone remains largely insipid.

The consolidation exercise may resume thereafter due to the lack of sustainable catalysts while the ongoing economic and corporate fundamentals could still keep the market subdued.

The continuing gains could now see the key index test the 1,397-1,400 hurdle with the ensuing resistance at 1,406 points. The supports, on the other hand, are at 1,390 and 1,385 points respectively.

Malacca Securities Research

The FBM KLCI advanced, bucking the mixed regional markets, mainly underpinned by gains in the banking heavyweights amid the emergence of bargain hunting activities.

Moving forward, we reckon that the US Federal Reserve chairman’s hawkish testimony, coupled with the uncertainties over the upcoming six state elections on the local front, may continue to weigh on the local bourse, thus limiting the upside potential for the FBMKLCI.

More clarity may be seen after the conclusion of the state elections. Commodities-wise, Brent crude traded above US$76/barrel while crude palm oil (CPO) price hovered just below RM3,550/metric tonne.

The FBM KLCI climbed for the second session as the key index crossed above its daily EMA20 level. Technical indicators turned positive as the MACD Histogram extended a positive bar while the RSI is climbing towards 50.

Resistance is pegged along 1,400-1,440 while the support is set around 1,370. – June 22, 2023

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