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 remains on the ascend, chalking up another 3.2 points to end at 1,463 points and breaking out of its most recent high.

Much of the gains were supported by the sustained bargain hunting by foreign funds as they still dominated trades.

Construction stocks drew rotational interest in the broader market, emerging as the day’s big winners.

On the whole, winning stocks still beat losers albeit by a small margin as profit taking escalated with traded volumes pulling back slightly.

Stocks could still mount minor gains over the near term despite the weakness among regional and key global indices as there remains fresh buying interest from foreign funds.

As it is, their buying support have been instrumental for the FBM KLCI’s recovery over the past month and has also allowed the key index to recoup most of its 1H 2023 losses as well as preserving much of the market’s near-term positivity.

At the same time, the recent gains have also seen the FBM KLCI’s valuations nearing their fair values which could slow any further ascend as buyers become more selective.

Furthermore, this could also increase profit taking activities for the recent gains to be absorbed, thus leaving market conditions choppier.

For now, the key index may only make a pass at the immediate resistance of 1,465 level which may become a formidable level to clear while the 1,472 points resistance is a more distance target.

Meanwhile, the immediate support is at 1,462 points, followed by the 1,455 level.

Malacca Securities Research

The FBM KLCI outperformed the mostly negative regional markets, driven by final hour buying in selected utilities and banking heavyweights.

We expect the positive performance in recent days to sustain with foreign funds continued with their net buying mode on local equities.

Lower liners may also capitalise on the positive market breadth with rotational play noticeable within the construction and property-related stocks.

Meanwhile, the negative developments on Wall Street overnight following the hawkish undertone from the US Federal Reserve may limit the upside potential in our local market.

Commodities-wise, Brent crude dipped below US$84/barrel while crude palm oil (CPO) prices stabilised above RM3,800/metric tonne.

The FBM KLCI formed a bullish candle as the key index took another step forward to close above the 1,460 level yesterday.

Technical indicators remained positive as the MACD Histogram extended another positive bar while the RSI is treading marginally below the overbought territory.

The next resistances are located along 1,480-1,500 while the support is pegged around 1,420-1,440. – Aug 17, 2023

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