What to expect on Bursa Malaysia this Wednesday

BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:

Inter-Pacific Research

As expected, the FBM KLCI started the new year on a soft note with profit taking activities still dominating trades on Bursa Malaysia.

However, the key index managed to recoup most of its intraday losses to end the day with minute losses and staying above the 1,450 level at the close.

Nevertheless, bargain hunting emerged on many lower liners which allowed market breadth to return to the positive side. Traded volumes also improved, rising another 5% to near the 5 billion shares level.

Despite the key index recouping most of its intraday losses yesterday, sentiments on the heavyweights remain insipid and this could keep the FBM KLCI subdued for longer.

As we have noted, there remains few catalysts – both from domestic and overseas sources – to help lift the key index away from its mostly range-bound trend and this could continue to keep a lid on its near-term performance.

At the same time, there is also no change to the country’s economic and stock market fundamentals, and this could continue to weigh on Bursa Malaysia’s near-term prospects.

For now, however, we see the key index remaining range-bound between the 1,450 and 1,460 levels with the downside bias to also stay due to the lack of buying interest. The other support and resistance levels remain at 1,452 and 1,458 points respectively.

Malacca Securities Research

Without any significant catalysts coupled with the softer manufacturing activities in China, the FBM KLCI closed lower yesterday.

Similarly, Wall Street started the year on a mixed note led by Apple Inc following the downgrade from Barclays.

We believe the overall sentiment could be turning negative as 10-year Treasury yields climbed near 4.0%.

Meanwhile, investors could be waiting for the next Federal Open Market Committee (FOMC) meeting (end January) to identify potential rate cut signals going forward.

Also, we believe the heightened geopolitical tension in the Red Sea region may spark downside risk for the markets.

Nevertheless, we still expect buying interest to emerge on the local front with catalysts such as the potential revival of Kuala Lumpur-Singapore High Speed Rail (HSR) project, National Energy Transition Roadmap (NETR) and New Industrial Master Plan (NIMP) as well as the launching of the PADU central database hub.

On the commodity markets, Brent crude prices ended around the US$76/barrel level despite the rising tension in the Red Sea.

The FBM KLCI ended lower. However, the technical readings on the key index were slightly mixed, with the MACD Histogram extending a weaker negative bar while the RSI dipped slightly below the 50 level.

The resistance is envisaged around 1,470-1,480 while the support is set at 1,440-1,450. – Jan 3, 2024

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