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Marred by political developments

Consumer, banking and glove stocks pulled the FBM KLCI down amid regional uptrend, reflecting negative sentiment in the market affected by political developments and potential downward revision of country’s economic growth projection. However, we still expect mild bargain hunting activities to emerge amid the improvement in vaccination rate across the country. Commodities wise, oil price fell marginally (but still hovering above USD75) over concerns about global economic recovery on the back of spreading Covid-19 variants.
market pulse

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Jaks Resources Bhd – 29Jul21

While there will be no financial impact on JAKS, we view the matter to be favorable to restore JAKS reputation amongst investors after being clouded by uncertainties over the past 2 years amid concern over potential impairments from the aforementioned matter. Moving forward, JAKS will continue to focus on current operations as well as business expansion plans, particularly in the power and renewable energy business segment.

market pulse

Still in consolidation

The FBM KLCI closed mildly positive following the late bargain hunting activities,
but gains were capped amid unrelenting Covid-19 cases as well as the recent
political developments. Despite daily Covid-19 infection continue to be on the rise
amid ramped up testing in Klang Valley, we expect the vaccination rate should
brush off negative sentiment and traders may look for recovery opportunities. Also,
both the Hang Seng Futures and overnight Wall Street could be due for a technical
rebound and may spillover towards stocks on the local front, especially on the tech
sector. Commodities wise, CPO price was down as demand were seen slowing
down from India and China, while the crude oil extended its gains.

technical focus

Technical Focus – MSM

Leading local sugar producer, commanding approximately 60.0% market share in the local sugar market after having produced 1.0m MT in 2020 that operates 2 sugar refineries with products consumed locally and shipped mainly to Asia countries.
Aims to increase utilisation factor in MSM Johor which is only hovering around 30.0% in 2020, while evaluating for potential disposal to streamline operations. Dry weather in Thailand is expected to prolong to 2022 and the drought that dimmed Brazil productions may support the elevated sugar prices. Technically, traders may anticipate for a potential flag-formation breakout above RM1.32 to target the next resistance of RM1.41-1.52, with long term target at RM1.72.

market pulse

Tepid recovery

Bucking the regional downtrend move, the FBM KLCI rebounded and posted
modest gains on the back of bargain hunting activities as well as expectation on
the economy reopening by October. Although investors will be shifting their focus
from daily Covid-19 infections to the positive vaccination rate locally, the local
sentiment may still remain cautious following the negative performances in China
and Hong Kong after Beijing announced additional measures for the technology,
education and real estate’s sectors. On a side note, foreign investors are net seller
for the third session.

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