BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Hong Leong Investment Bank Research
We reiterate our short-term sideways call for now as the FBM KLCI continues to trade within the 1,556 (year-to-date low) and 1,600 psychological levels (with stiffer resistances situated at 1,623-1,642).
The unwavering spread of COVID-19 infection locally and lingering fears of further movement control order (MCO) tightening in Selangor (the biggest GDP contributor to Malaysia) as well as a slower vaccination pace will continue to suppress any rebound potential as we enter the peak of the May reporting season.
On stocks’ selection, the overnight commendable Nasdaq performance (from -231 pts to -4 points at 13,299) may spill over to local technology stocks, triggering renewed buying optimism after recent sell-down (-24% from peak for stocks under our coverage).
Malacca Securities Research
The FBM KLCI succumbed to selling pressure as the COVID-19 daily confirmed cases jumped to all-time-high in the country.
The ongoing pandemic, however, benefited the healthcare sector. Despite concerns over possible stricter lockdown in Selangor that could dampen the market sentiment, we expect mild bargain hunting activities to emerge following yesterday’s strong sell-down.
Meanwhile, buoyant crude palm oil (CPO) prices have benefited companies’ performance in the plantation sector.
The FBM KLCI failed to clear the 1,600 psychological level as the key index finished lower after hovering in the negative territory for the entire session.
Technical indicators turned negative as the MACD Histogram has turned red, while the RSI is still below the 50 level.
We expect the key index to trade below 1,600 level over the near term, support is located around 1,555-1,565. – May 20, 2021
