What to expect on Bursa Malaysia this Tuesday

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 a mild pullback yesterday after it managed to recoup most of its intraday losses on mild bargain hunting in the afternoon session.

This follows the announcement by the Prime Minister of a reduction in stamp duties on stock transactions.

However, conditions in the broader market were more subdued as most Bursa Malaysia sub-indices ended the day lower on thinning volumes.

At the same time, market breadth also turned negative, largely in line with the region’s weaker market performance.

Although the reduction in stamp duties on stock transactions is welcomed which is largely a reversal from the increases announced by the previous PM, we see limited immediate impact from the move as market fundamentals will still be the key determinant of investor interest.

As it is, there is still cautiousness over the county’s corporate fundamentals and market conditions are likely to remain insipid for the time being.

As such, we see the key index making little headway due to the continuing lack of catalyst, hence is set for further sideway trend as it looks to build up a position around the 1,380 level ahead of the mid-year closing.

We also see mild buying support from local institutions continuing in what is seen as window dressing activities with the immediate hurdle pegged at the 1,390 level, followed by the 1,395 level. The supports, meanwhile, are at the 1,380-1,385 levels, followed by 1,375 points..

Malacca Securities Research

The FBM KLCI edged marginally lower along with the softer regional markets’ movements amid cautious sentiment prior to the US Federal Reserve chairman’s upcoming semi-annual testimony.

While the government’s decision to cut stamp duty for shares traded on Bursa Malaysia may stimulate trading activities, sentiment may remain tepid without fresh catalysts on the global front and ahead of the six states elections.

Meanwhile, investors may stay mixed in view of the upcoming China’s interest rate decision. Commodities-wise, Brent crude price remained solid above US$76/barrel while crude palm oil (CPO) price hovered above RM3,750/metric tonne.

The FBM KLCI booked marginal losses after erasing most of its intraday losses. Technical indicators remained mixed as the MACD Histogram extended a positive bar while the RSI hover below 50.

Support is located around 1,370 while the resistance is pegged along 1,400-1,440. – June 20, 2023

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