BELOW are excerpts of viewpoints from two selected research houses on what investors can expect in the day ahead:
Inter-Pacific Research
The key index continues to head south with the state of emergency declaration placing a dent to market sentiments albeit it managed to recoup most of its intraday losses that reached a low of 1,590 points following the Prime Minister’s assurance that the emergency powers is only to tackle the COVID-19 pandemic.
Nevertheless, market breadth was positive with many of the lower liners and broader market shares regaining some traction after their recent weakness.
We see limited fall-out from the movement control order (MCO) and state of emergency as most economic activities are allowed to proceed.
Nevertheless, the recovery prospects for 1Q 2020 is placed under a cloud as it would now be slower even if the impact is relatively benign.
Still, we think the recovery is merely delayed as the vaccination that is poised to start in March/April could provide some measure of stability for the economy in due course.
In the interim, we think that Malaysian equities could stage a rebound as there is now more clarity on the MCO and emergency statuses that should provide some calming effects after the recent weakness caused by the heightened uncertainties over the above issues.
We see the key index regaining the 1,620 level over the near term with the next hurdle at the 1,633 level. On the downside, the 1,600 psychological level is still the immediate support, followed by the 1,590 level.
Malacca Securities Research
The FBM KLCI recouped most of its intraday losses in the afternoon session yesterday as market sentiment was lifted by a nationwide state of emergency proclaimed by the Yang di-Pertuan Agong that will be enforced until Aug 1.
While the move should be reducing some of the political uncertainties in the country, the key index still closed lower as the number of COVID-19 cases remains high.
However, we believe the local bourse should find stability soon as some bargain hunting activities were noticed in the market.
The lower liners may extend their gains yesterday as the rise in the indexes was supported by rising trading volume throughout the day.
While the FBM KLCI continued to close below the EMA20 level, a consolidation is expected to the key index with the 1,600 level continues to hold.
Immediate resistance is at 1,660 while support is pegged at 1,570, followed by 1,560. – Jan 13, 2020
