BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
There were more downsides on Bursa Malaysia yesterday due to the continuing uncertainties over the global trade environment after President Trump rachet up his tariff threats.
The end of the results reporting season also provided few leads for the market to follow with foreign institutions maintaining their selling streak to send the key index lower.
Lower liners also saw continuing weakness that left total losers again overwhelming gainers by a sizeable margin.
Despite the overnight gains on many key global indices, the same positivity is unlikely to permeate to Bursa Malaysia stocks due to the lack of buying impetuses, especially among foreign investors who continue to trim their holdings of FBM KLCI constituents.
There remain concerns that Malaysia’s external environment could weaken further in 2H 2025 as there is still little progress in the negotiations with the 90-day reprieve from the reciprocal tariffs drawing closer.
At the same, domestic leads are also fewer with the recently concluded results reports unlikely to spur market confidence.
Consequently, the downside bias is likely to remain for now as there are also few signs of a rebound as yet with the psychological 1,500 level to be the main support for now.
If it gives way, the other supports will be at 1,492 points and 1,486 points respectively. The resistances, meanwhile, are at 1,512 points and 1,521 points respectively.
Malacca Securities Research
With the steady momentum on Wall Street, we expect bargain hunting activities to emerge on the local front, especially given the FBM KLCI is trading at a discounted P/E (price-to-earnings ratio) of -14x against its long-term average P/E of 17x.
We believe Sime Darby Property Bhd could be a good trading candidate as it is being supported by an unbilled sale of -RM3.8 bil, a favourable product mix and its anticipated opening of the KLGCC Mall in 2H 2025 which we expect to enhance margins and earnings stability.
Meanwhile, amid the on-going US-China trade uncertainties, we believe REITs could act as a defensive play by offering a dividend yield of over 4% while Sunway REIT’s breakout may spur continued buying interest in the sector.
The key index extended its losses and traded below the MA (moving average) lines with technical indicators showing negative momentum at the current juncture; the MACD histogram has expanded negatively while the RSI approaching an oversold level.
Resistance is anticipated around 1,518-1,523 while support is located at 1,483-1,488. – June 5, 2025
