BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The FBM KLCI rebounded stronger-than-expected yesterday, with rotational buying on banking stocks helping the key index’s charge back above the 1,585 level at the close.
The broader market, however, remained mixed with most FBM ACE and technology stocks retreating, while FBM Small Cap stocks posted minor gains.
As a result, market breadth was also mixed, while total traded volumes thinning further on the lack of leads.
Although yesterday’s gains were firmer-than-expected, we maintain our view that Malaysian equities are still shrouded by wariness over its near-term direction, largely in the absence of significant impetuses to sustain an uptrend.
Hence, we view the market’s condition as remaining mostly indifferent due to the on-going concerns over the country’s economic and corporate earnings recovery prospects that will continue to cloud the overall market prospects.
This also means that the FBM KLCI would, for the most part, linger within a sideway path until a more definitive trend emerges.
In the interim, we think that the key index could attempt to remain on its mild recovery trend, targeting the 1,590 level for now, with the 1,593 level the next hurdle.
On the downside, the supports are at 1,580 and 1,575 points respectively.
Malacca Securities Research
Gains on the FBM KLCI was encouraged by the reducing COVID-19 transmission coupled with the strong performance delivered by the Employees’ Provident Fund that saw gross investment income grew 58.6% year-on-year to RM19.29 bil in 1Q 2021.
We reckon that further upsides are in the cards, premised to the progressive step up in vaccination efforts, while investors may keep an eye on the unemployment rate data that demonstrate sequential improvements since January 2021.
Meanwhile, crude oil prices advanced while the crude palm oil (CPO) prices retreated. The FBM KLCI rebounded to recover most of its previous session losses as the key index closed above the EMA20 level.
Technical indicators turned positive as the MACD Histogram turned green, while the RSI climbed marginally above the 50 level.
We expect a slight upward bias on the key index over the near term with resistance located around 1,600-1,620, while the support is set at 1,555-1,565. – June 9, 2021
