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Bargain hunting may emerge

The eleventh hour sharp selling pressure in selected index heavyweights sent the local bourse spiraling lower yesterday. After the previous session slump, we think that bargain hunting activities may emerge on the local bourse as investors nibble on beaten down stocks. It was a tale of two sides as the lower liners managed to march higher on the back of the rotational play, coupled with the favourable market sentiment.
market pulse

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technical focus

Technical Focus – O&G

In the latest OPEC meeting, OPEC and its allies have collectively cast aside proposals for expanding output and decided to keep production in lid by sticking with current quotas for April 2021. The unexpected move has led to a tighter production has subsequently sent oil prices to their highest level since January 2020. We reckon that the move bodes well for oil & gas players, capitalising on the recent recovery with Brent oil prices surging towards the USD70/bbl. Back home, the higher CAPEX allocation at RM40-45bn by PETRONAS for 2021 (compared to RM33.4bn spent in 2020) is also welcoming for domestic oil & gas players.

market pulse

Back above 1,600

Last Friday, the FBM KLCI bucked the losses on Wall Street and surged above the 1,600 psychological level; the continued buying interest in banking heavyweights after BNM’s decision to remain the OPR, coupled with the gains in energy stocks spurred the key index rally. We reckon the positive momentum of the key index to continue as the rallies in the banking sector may indicate market’s hope for economic recovery. Meanwhile, the Brent oil price continued seeing its uptrend after OPEC and its allies decided to keep production steady through April.

macquarie structured warrants 20200914

Good demand for HSI and KLCI warrants amid volatile market

Overall warrants turnover for the first week of March increased slightly by 3.2% week-on-week (w-o-w) to RM419.3mil, mainly driven by the increased trading activity in warrants over the Hang Seng Index (HSI) and FBM KLCI Index (KLCI) with both contributing a total of 34.5% of the total warrants turnover.

market pulse

Still within consolidation mode

The FBM KLCI settled in red in tandem with the regional peers as selling pressure in the glove stocks returned, offsetting the gains on the banking heavyweights following the unchanged Overnight Policy Rate (OPR) by Bank Negara Malaysia. Tracking the losses on Wall Street overnight, we expect the local bourse may continue to consolidate further as market players are likely to trade on a cautious tone on the broader market. Nevertheless, we expect traders to position themselves for the recovery theme as Covid-19 vaccination is taking place. Meanwhile, the Brent oil price has surged firmly above USD65.

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