BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Once again, Malaysian equities were left to dither with trades limited by the lack of direction. As a result, market interest reverted to the thin side with market breadth still on a mixed note.
The key index was sent lower at the close on selling of plantation stocks as palm oil prices retreated, while the rest of the market was relatively unchanged amid thinner participation with most retail players were still on the wayside.
There is no change to our immediate market view as we expect the largely sideway pattern to continue over the near term.
The Government’s unveiling of the National Recovery plan is unlikely to have a telling effect on the equity market’s near-term performance as the pace of the recovery is likely to be gradual amid the slower economic re-opening process.
This could also mean that the country’s economic and corporate earnings performance may remain stuttered into 3Q 2020.
With the indifferent trend to persist, we think the FBM KLCI could remain close to the 1,580 level as it attempts to build up a firmer base on the back of mild supports.
The other supports remain at 1,572 and 1,567 points, while the hurdles are at 1,585 and 1,590 points respectively.
Malacca Securities Research
The FBM KLCI finished a see-saw session mildly lower after bargain hunting activities emerged in the previous session as market sentiment remained cautious prior to the National Recovery Plan announcement.
We expect the projection that Malaysia might gradually open up the economy by September according to the announcement, coupled with the accelerating daily vaccination rate in the country to lift the market sentiment on the local front.
Commodities-wise, crude palm oil (CPO) price rebounded after a sixth-session decline, while the Brent oil price stayed firmly above US$73.
The FBM KLCI continued the stay in consolidation as the key index closed below the EMA20 level.
Technical indicators remained mixed with the MACD Histogram extended a green bar, while the RSI is below 50.
We believe the key index may consolidate sideways with the resistance set along 1,600-1,610, while the support level is envisaged around 1,555-1,565. – June 16, 2021