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Hovering near support

The FBM KLCI failed to extend its gains amid pervasive negative sentiment and weak buying interest, bucking the regional uptrend. With the World Bank cutting Malaysia’s 2021 GDP growth projection amid slower-than-expected economic recovery, the sideways trade is likely to persist without a fresh catalyst under the current economic and public health crisis. Investors may also look at the US's 1Q21 GDP growth rate, while Bank of England’s interest rate decision, which will be releasing tonight. Commodities wise, the oil price has risen above the USD 75 per barrel level.
market pulse

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market pulse

Still eyeing 1,600

The FBM KLCI took a breather following a seven-day winning streak, as the key
index retreated from the 1,600 psychological level on the back of profit taking
activities. However, tracking the strong gains from Wall Street overnight, we expect
local equities to gain momentum and investors could focus on the upcoming
Budget 2022 beneficiaries, which we anticipate some goodies to be revealed for
construction, telecommunication, and solar sectors. Commodities wise, the CPO
price declined after a surge in the previous session, while the crude oil price
rebounded above the USD84 per barrel mark.

market pulse

Spurred by foreign buying

The FBM KLCI closed above the 1,600 psychological level amid persistent buying
from foreign funds over the past week and sentiment remained positive on the
back of the discussion of international borders reopening going forward. The
recovery theme sectors such as construction, building material and financial
services sectors saw substantial gains and may remain under the limelight in the
near term ahead of Budget 2022. Meanwhile, the plantation counters are gaining
traction amid a jump in CPO price; the CPO price has rebounded and surged by
3.4% to close above the RM5,000 level.

technical focus

Technical Focus – KERJAYA

One of Malaysia’s leading construction players with strong historical track record of completion of notable projects such as St. Mary Residences, The Shore Mixed Commercial Development, EcoSky Condominum and Vista Residences. Solid unbilled orderbook of RM3.40bn that represents an orderbook-to-cover-ratio of 4.2x against FY20 revenue of RM811.0m will provide earnings visibility for next 3 years. Equipped with a healthy balance sheet with a net cash position of RM195.0m in 2QFY21, translating to net cash per share of 15.7 sen (c.12.3% of share price). Technically, traders may anticipate for a breakout above RM1.29 to target the next resistances at RM1.38-1.41 with long term target at RM1.53.

market pulse

Still on the ascend

Bucking the regional markets, the FBM KLCI extended its winning streak for the
sixth session, buoyed by persistent buying interest in index-linked banking and
telecommunication heavyweights on the back of positive sentiment in tandem with
the rising foreign buying interest. Despite the overnight negative performance on
Wall Street, we believe the local bourse may remain bullish over the near term and
move closer to the 1,600 psychological level, supported by the reopening of
economic activities as vaccination rate of adult population has achieved above
90%. Meanwhile, commodities wise, both the CPO and crude oil prices saw a
pullback as inflation concerns picked up.

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