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

Malaysian stocks ended last week on a firmer note ahead of the Lunar New Year break as an end-of-day pick-up on selected telco and media stocks helped the key index to re-capture the psychological 1,500 level.

The market also reacted positively to the country’s lower inflation reading with the lower liners and broader market shares also ended mostly higher, notching up decent gains to sustain their upsides.

Expectedly, market breadth was positive but market volumes were thinner for the day.

Although there could be some hesitation at the start of the week’s trading on profit taking and lower participation rate as many market players are still on the Lunar New Year break, overall market conditions are likely to stay positive amid the calmer market conditions that will provide the much-needed support.

As it is, the domestic and global inflationary pressures are easing and this will also reduce the odds of further punitive interest rates hikes, lessening the odds for a severe economic downturn.

At the same time, the recent gains in global equities could also support the FBM KLCI’s near-term performance. After a brief consolidation, we see the key index attempting to clear the 1,500 level to retest its recent highs of 1,502-1,505 levels.

Thereafter, the hurdles are at 1,511 and 1,516 points respectively. The supports, on the other hand, are at 1495 and 1,490 points respectively.

Malacca Securities Research

The FBM KLCI took another step higher to close marginally above the 1,500 level. We reckon that the trading activities will be muted this week amid the holiday-shortened trading week as most investors could still be enjoying the break.

Nevertheless, bouts of upsides are to be expected with traders taking further positions in riskier assets following Bank Negara Malaysia’s (BNM) unexpected move to maintain the overnight policy rate (OPR).

Commodities-wise, Brent crude slipped to close around US$86/barrel while crude palm oil (CPO) price is approaching RM3,900/metric tonne.

The FBM KLCI inched higher, surpassing marginally above 1,500. Technical indicators remained positive as the MACD Histogram trended higher while the RSI remains above 50.

Should 1,500 sustained over the foreseeable future, the next resistances are envisaged around 1,525-1,540 while supports are located at 1,450-1,460. – Jan 25, 2023

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