BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities were on a purple patch yesterday, surging on the easing trade dispute between the US and China that also drew more players back into the market.
The upsides were also broad-based as total gainers overwhelmed losers by a wide margin with the technology sector jumping 6.0%.
The gains were also due to Malaysian equities playing catch-up to the bounce among key global indices recently. Traded volumes surged past 4 billion shares on the return of market interest with the foreign funds’ net buying of nearly 800 million shares.
With the strong buying interest returning, particularly from foreign funds, the key index’s ascend may prolong, taking cue from the improved global equity market sentiments that were buoyed by the easing trade dispute between the US and China.
However, there could be some dithering in the session ahead after the recent strong gains have left technical indicators near toppish conditions.
At the same time, market players will also be awaiting the 1Q 2025 GDP data to be released this Friday (May 16) for clues on the tariff’s impact on the country’s economic performance.
As such, further upsides may become more modest amid the already toppish conditions while bouts of profit taking may also emerge that could slow the gains.
On the upside, the hurdles are now at the 1,586-1,590 levels which also corresponds to the 200-day moving average line that may serve as a significant resistance level.
The other hurdle is at the psychological 1,600 level while the supports are at the 1,575 points and 1,565 points respectively.
Malacca Securities Research
Following the rally on Wall Street, we expect further upside in Malaysia’s Technology sector after the US-China tariff truce coupled with news that the Trump administration has formally rescinded the Biden-era AI Diffusion Rule which could boost optimism in local tech counters.
On the flip side, the US-China trade deal is seen as negative for Malaysian glove players as it makes Chinese gloves more competitively priced, hence hurting demand for Malaysian gloves.
Besides, we believe trading opportunities will extend within the steel sector like Hiap Teck Venture Bhd, Melewar Industrial Group Bhd and Malaysia Steel Works (KL) Bhd as Malaysia is set to impose anti-dumping duties on steel and tinplate from China and other Asian nations.
The key index experienced a gap up with technical indicators showing positive signals. The MACD histogram expanded positively while the RSI is approaching 70.
Resistance is anticipated around 1,597-1,602 while support is located at 1,562-1,567. – May 14, 2025
