BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
Malaysian equities managed to stage a mild recovery following the steep falls a day earlier when the market was spooked by the introduction of a one-off prosperity tax.
There were light bargain hunting activities that helped to lift the key index, but gains were limited as buying momentum was still tepid as evidenced by the still low traded volumes.
Nevertheless, the mild bargain hunting extended to the lower liners and broader market shares that helped market breadth to turn positive.
Despite yesterday’s rebound, market conditions are still guarded with the prosperity tax concerns still weighing on market sentiments.
Therefore, this could still put a lid on the market’s near-term performance as investors are still assessing impact of the one-off tax on corporate earnings performance ahead.
Furthermore, there are also few noteworthy leads to entice market players to make a stronger return.
As such, there will still be bouts of choppiness with selling remaining a feature that could also leave the key index to whipsaw between the 1,520 and 1,550 levels over the near term. Meanwhile, there is interim support and resistance at 1,530 and 1,545 points respectively.
Malacca Securities Research
Given the rebound on the FBM KLCI, we expect the near term floor has been found and investors could have digested the proposed one-off cukai makmur and the contract notes stamp duty changes.
All-in-all, the negative earnings impact could be lesser than expected, hence bargain hunting activities have emerged.
Also, with the strong broad rally on the Wall Street, we do opine that buying interest may spill-over to technology stocks on the local front which could be one of the sweet spot in our local bourse.
Commodities-wise, crude palm oil (CPO) price managed to maintain its trading range along RM4,800-RM5,000 while Brent oil is still hovering above US$84/barrel.
Following the significant decline on Monday and mild bargain hunting activities on the local front, we think the market may turn into consolidation phase in the near term.
Technical readings are still negative for the FBM KLCI; the MACD Histogram has extended another negative bar while RSI is below 50. The resistance is located around 1,550-1,560 while support is pegged at around 1,520. – Nov 3, 2021
