BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Market conditions turned cautious yesterday, sending the key index lower as profit taking activities escalated in tandem with the weakness among many regional indices following the downgrade of US’ credit rating.
As a result, the key index closed at its lowest level in a week with the broader market shares also tumbling and technology stocks emerging as the day’s biggest losers.
Meanwhile, losing stocks overwhelmed gainers by a wide margin as selling volume picked up.
Following yesterday’s knee-jerk reaction to the downgrade of US’ credit rating, market conditions are becoming more hesitant amid the availability of fewer catalysts to sustain the Malaysian equity market’s recovery.
Nevertheless, the FBM KLCI’s recovery has been relatively firm to enable it to re-capture much of the tariff induced losses with valuations also recovering to their fair values.
For now, market players will await more corporate results to be reported before deciding on their next course of action.
Consequently, the key index is likely to be in a range-bound trend for the time being with slight upsides possible on mild bargain hunting on some of yesterday’s big losers.
On the upside, the resistances are at the 1,558-1,560 levels, followed by the 1,567 level. Meanwhile, the supports are at the psychological 1,550 level and 1,542 points respectively
Malacca Securities Research
With Wall Street trading flat, we believe the local sentiment may improve.
We also expect Gamuda Bhd’s recent land acquisition (three land parcels totalling 336 acres for RM248.7 mil) to be a positive development for construction companies like Inta Bina Group Bhd by potentially boosting its job replenishment.
In the plantation sector, we are positive on Johor Plantations Group Bhd which stands to benefit from Indonesia’s increase of its palm oil export levy from 7.5% to 10%, coupled with its robust earnings and attractive valuations (JPG’s P/E: 10.4x, peer average P/E: 14.8x).
Also, amid the uncertain tariff environment, we view Reach Ten Holdings Bhd as a defensive play due to its aggressive network coverage expansion in Sarawak which should support a stable recurring income.
The key index closed lower yesterday but continued to trade above the MA (moving average) lines with technical indicators showing positive signals. The MACD histogram has expanded positively while the RSI hooked above 50.
Resistance is anticipated around 1,571-1,576 while support is located at 1,536–1,541. – May 20, 2025
