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market pulse

Sentiment still dour

Mirroring regional downtrend, the FBM KLCI ended the week in red despite final hour bargain hunting. However, we believe buying support could emerge as the market sentiment is likely to turn positive following the news on the arrival of China’s CoronaVac vaccine in Malaysia. Nevertheless, we expect the political developments may provide the volatility to the market. On the side note, commodities upcycle in crude palm oil and Brent crude oil are likely to sustain over the near to mid-term based on the current momentum.
market pulse

Return of volatility

The FBM KLCI has rebounded strongly amid bargain hunting activities as steel-related and technology stocks were traded higher following several strong sets of results under the respective sectors. Meanwhile, healthcare sector was the sole decliner in the broader market. We believe the market will be pricing in Covid-19 vaccination progress and market may trend on an upward bias tone, focusing on recovery theme stocks. On the commodity side, the crude palm oil price has climbed above RM3,700, while Brent oil price is firmly trading above USD65.
market pulse

Rebound in sight

Selling pressure in the glove counters persisted, pushing the FBM KLCI into the negative territory in the afternoon trading session. Whilst the National Covid-19 Immunisation Programme kickoff did not boost the local bourse yesterday, we opine some bargain hunting activities to arise in lower liners after close to 1,000 counters closing in the red. Meanwhile, the Brent oil price continues to climb above USD67.
market pulse

Bargain hunting may take shape

In contrast with the regional gains, the FBM KLCI failed to sustain its intraday gains as the key index slipped into negative territory during the final trading hour. We expect the arrival of the second batch of Pfizer-BioNTech vaccine today and the vaccine distribution to different states will continue to attract buying interest in recovery-theme stocks moving forward. Meanwhile, crude oil price continued to remain firm above the USD65 level for the time being. Also, traders will focus on high earnings certainty sectors during this reporting season.
market pulse

Corporate earnings in focus

Selling pressure in glove heavyweights triggered as Covid-19 could come to an end with the arrival of Covid-19 vaccine. Despite selling activities on Wall Street overnight, we believe there could be some fresh buying support given the IDSS and PDT short sale have been extended for another 6 months. We believe traders may lookout for bashed down stocks yesterday. Also, we observed that the Brent oil price has climbed strongly overnight above USD65.
market pulse

Arrival of Covid-19 vaccine

Bucking the regional trend, the FBM KLCI snapped three-day losing streak to close higher on bargain hunting. Sectors such as telecommunication and technology were headed higher following the launch of MyDigital initiative and the Malaysia Digital Economy Blueprint. Whereas the key index is subject to further consolidation, we believe the earlier-than-scheduled national vaccine rollout on coming Wednesday and the declining number of Covid-19 cases should lift the market sentiment and traders may focus on recovery theme again.
market pulse

Sentiment remain cautious

In line with most regional peers, the FBMKLCI skidded on profit taking activities for the third straight session and market sentiment may remain cautious ahead of the weekend. Despite ongoing profit taking, we opine the downside risk could be limited as some bargain hunting may start to take place ahead of the full blown reporting season next week. Meanwhile, the Brent crude oil price has loses its grip, pulling back from level above the USD65.
market pulse

Back below 1,600

Following the announcement of MCO extension in several states, the local bourse endured a rough ride as economic recovery progress took another backseat. The weakness was also largely in line with the negative performance across regional peers which we reckon that the pullback is deem to be healthy to allow the recent gains to be digested. While the market liquidity has yet to taper, we think the rotational play amongst the lower liners may prolong with the on-going batch of corporate earnings release largely in focus.
market pulse

Liquidity driven market

Profit taking activities emerged on the FBM KLCI, snapping the four-day positive streak. We believe sentiment should stay positive, despite the mixed trading tone on Wall Street and the MCO extension in several states as we think the ongoing rally in the crude oil price and the clearer timeline for the Covid-19 vaccination programme should be the focus for the economic to recover moving forward. As we are heading into the reporting season, companies with high earnings certainty could be under the limelight.
market pulse

An Oxpicious start

The first trading day after the Lunar New Year break saw the FBM KLCI climbing with all sectors finished in the green, in line with its regional peers. Meanwhile, oil price rose to its highest since January 2020 on the back of the Middle East tensions. With Wall Street inching higher overnight, we opine trading interest on the local front will remain robust as vaccine rollout across more countries may drive the optimism for an economic recovery. Likewise, the lower liners may continue its uptrend in the near term.
market pulse

Re-testing 1,600 again

Despite the sharper-than-expected economic contraction of -3.4% in 4Q20, the FBM KLCI inched up ahead of the Lunar New Year holiday as investors may have priced in the impact of the ongoing MCO. We expect the positive sentiment on Wall Street overnight may spillover to stocks on the local front as market players should refocus after the long break ahead of the full blown reporting season. Meanwhile, we noticed crude oil price has surged above USD62 firmly last week.
market pulse

Focus on 4Q20 GDP data

The FBM KLCI charged higher yesterday, mainly boosted by the gains in banking heavyweights as traders tagged along with the recovery theme. However, we believe the tone may turn slightly cautious ahead of the Bank Negara Malaysia’s (BNM) announcement on Malaysia’s economic performance for 4Q20. Also, market participants might reduce trading activities prior to the long weekend. Hence, the FBM KLCI may stay within a rangebound mode throughout the session.
market pulse

Upward bias view on broader market

Despite mixed trading tone on Wall Street overnight, the FBM KLCI tracked its regional peers to close higher yesterday. We reckon the local bourse to remain upside bias view at the current juncture, lifted by buying interest in recovery-themed stocks and the energy sector – the latter could be focused on the back of firmer crude oil price. In view of the number of Covid-19 cases dropped below 3,000 level yesterday, market should position themselves into recovery themed stocks at least for this week.
market pulse

Bargain hunting may emerge

As the local bourse saw cautious trading sentiment ahead of the Lunar New Year celebration, investors may continue to reduce their exposure in the stock markets. Meanwhile, with the National Covid-19 Immunisation Plan came closer, and the daily cases stayed within the below the 4,000 mark for the fourth day running, investors may point towards recovery play moving forward. Also, Brent oil price has surged above the US$60 level, which may set a positive tone on the local front.
market pulse

Still wobbly

The FBM KLCI underperformed its regional peers last Friday, as gloves and plantation heavyweights lost their ground following their recent rallies. The selling pressure among local and foreign institutions continued to weigh on the local bourse despite buying interest among local retail investors. With the US stockmarkets inching higher last Friday, we expect the local bourse may see some rebound, but traders should be trading cautiously ahead of the Lunar New Year holiday. The lower liners may see some rebound ahead of the vaccine rollout.
market pulse

Improving sentiment

Mirroring the gains on Wall Street, the FBM KLCI edged mildly higher after Prime Minister Tan Sri Muhyiddin Yassin’s update on the scheduled rollout of Covid-19 vaccination programme by the end of February 2021. The announcement coupled with the positive performance on Wall Street overnight may lift the overall market sentiment on the local front. Meanwhile, the lower liners will continue to enjoy their upward momentum as liquidity remains well on the equities market.
market pulse

Choppiness prevails

After experiencing a downward trend since mid-January, the FBM KLCI delivered a second session of gain as most of the counters ended positive except for healthcare stocks. As investors likely to have priced in news of further lockdown measures, buying interest in selected counters with high earning certainty during the February reporting period should be seen, while the broader market should be lifted by the mildly positive performance on Wall Street overnight.
market pulse

Recovery in progress

While the broader market may price in the extension of MCO2.0 (except for Sarawak), we believe market players may turn their focus to Sarawak-related stocks following the uplift of MCO2.0 as more economic sectors are allowed to operate moving forward. Also, tracking the positive sentiment on Wall Street overnight that should lift the overall market sentiment on the local front.

Silver lining ahead

Tracking the regional and Wall Street gains overnight, market players could be factoring in a Conditional MCO instead of a strict MCO (albeit in a rising Covid-19 cases environment) moving forward to avoid further breakdowns in the economy. Thus, we may anticipate a mild rebound moving forward. However, the rebound may attract profit taking activities as Malaysia’s Covid-19 status has not flattened out at this current juncture. We might observe some trading interest within healthcare and vaccine related sectors in the near term.
market pulse

On a better footing

The FBM KLCI outperformed its regional peers to end mildly higher on Wednesday following the announcement by the Health Ministry on the supply of 18.4m doses Covid-19 vaccines by Pharmaniaga and Dpharma in March 2021. Given the rebound on Wall Street overnight, coupled with the relaxation of MCO to allow all businesses to operate until 10pm which may contribute to some positive impact to the market, albeit rising Covid-19 cases may still dampen the economic recovery. Meanwhile, the lower liners are seeing some rebound signs.
market pulse

Finding stability

In tandem with the regional peers, the FBM KLCI inched lower due to heavy selling in glove heavyweights and Petronas-related counters. With growing concerns over the still-rising Covid-19 cases, that may contribute to the potential extension of MCO (albeit with some relaxation in SOP). Hence, it may limit the upside potential on the key index over the near term until the vaccine rollout. Nevertheless, we expect some bargain hunting activities to emerge in the near term on high certainty sectors ahead of the February reporting season.
market pulse

Health DG Brushing off MCO3.0 concerns

The selling on the FBM KLCI yesterday could have overdone as Health DG brushed off concerns over MCO3.0 and broader market could perform a relief rebound today. On the glove related stocks, we believe HARTA’s upbeat result could spillover to buying support on glove manufacturers and glove proxies today. However, investors could stay cautious ahead of the release of Malaysia's Producer Price Index tomorrow. As foreign funds turned into the selling mode, we expect the rebound might face with profit taking activities in the near term.
market pulse

Volatility beckons

Tracking a mixed performance on Wall Street last Friday, we think the mild rebound on the FBM KLCI last Friday could further fizzle off today and market sentiment is expected to be cautious ahead of the first US Federal Reserve meeting under the Biden’s administration as well as the holiday-shortened week. As we are heading into the reporting season, investors may turn to selected sectors with high earnings certainty while the Covid-19 cases continued to rise.
market pulse

Below 1,600

With Wall Street charging towards its all-time-high region after Joe Biden’s transition into the White House, we expect mild bargain hunting activities to emerge on our local front. However, following the extension of the Movement Control Order for the six states to 4th February, we reckon the upside could be capped today as Covid-19 infections are still rising. Hence, it could be translating to another consolidation day. Nevertheless, we believe market players to rotate into several laggard plays in the stock market.
market pulse

Still searching for a footing

Tracking the strong gains on Wall Street overnight after Joe Biden was sworn in as the 46th US president, we expect rebound could be seen on the local front especially on the technology sector. Nevertheless, market volatility remains in place amid the expansion of MCO to all states except for Sarawak due to the worsening of the Covid-19 situation. On the banking sector, we expect trading interest will be seen after BNM’s move to keep the interest rate unchanged until the next meeting. Meanwhile, we expect the vaccine rollout plan that could come in 1Q21 may benefit the distribution segment.
market pulse

BNM’s OPR decision in focus

We expect the negative sentiment could persist over the near term as investors will be waiting for the Bank Negara Malaysia’s (BNM) decision on the overnight policy rate (OPR) later in the afternoon; any further cut in the OPR may cause downward pressure on banking stocks. Also, there have been some negative selling activities amongst the glove heavyweights and we believe it may continue for another session today. Meanwhile, consolidation might be seen for selected lower liners following the recent gains.
market pulse

Containing MCO 2.0 impact through PERMAI

The FBM KLCI extended another red bar as the talks around OPR cut in the mid-week continued to weigh on the major constituents of the key index – banking stocks. Meanwhile, the technology sector outperformed the local bourse yesterday as investors continued to like the sector for its higher earning certainty. We reckon the announcement by the Prime Minister of a RM15.00bn Malaysian Economic and Rakyat’s Protection Assistance Package (PERMAI) might lift the market sentiment, albeit investors’ sentiment to stay cautious ahead of the BNM MPC meeting.
market pulse

Turning wobbly

With the retreat of crude palm oil prices, coupled with the speculation of another round of Overnight Policy Rate (OPR) cut, investors could further reduce their position in plantation and banking heavyweights; that may translate to potential negative trading tone amongst banking stocks and dragging down the FBM KLCI this week. Also, market sentiment may remain weak amid the ongoing rising Covid-19 cases despite the re-imposition of MCO. On the flipside, we expect some rotational play towards building materials segment amid the firmer commodity prices such as tin, iron, aluminium and etc.
market pulse

Marking time

Tracking the negative sentiment on Wall Street, coupled with the pullback in the FBM KLCI yesterday, we expect trading tone on the local front to further consolidate. Also, the overheated rally in the technology stocks may take a breather with traders digesting their gains over the next few days. Given some of the essential sectors are still operating under MCO 2.0, companies shall be able to register some earnings at least for this quarter. Meanwhile, we expect traders to lookout for LSS4 and immigration related news over the near term.
market pulse

Striding higher

Tracking the gains on regional markets, the FBM KLCI has closed at the highest level since the beginning of the year, with buying interest seen in the recovery themed stocks such as banking and gaming heavyweights. Investors shrugged off concerns on the first day of MCO 2.0 while the essential sectors remain opened. The key index may take a little following yesterday’s rallies, but we expect the downside to be limited. The lower liners saw some rebound signs as the indexes made significant headway yesterday after recent consolidation.
market pulse

Recovery in progress

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 1st August 2021. 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.
market pulse

Economic recovery derailed

Fear over the new lockdown measures has driven profit taking activities on the local bourse, leading the FBM KLCI to close lower after a choppy trading session yesterday. Following the Prime Minister’s special address on the implementation of tighter movement restrictions in most parts of the country, we expect the market outlook to remain subdued today as further lockdowns may cause further stress to the economy. However, the negative market sentiment may not last long while the market awaits for vaccine rollout. The lower liners might also see greater selling pressure.
market pulse

Towering higher

Sharp gains in gloves heavyweights came as investors feared for another round of nationwide or certain states lockdown being imposed as buying activities have now catered towards the healthcare sector. As it is, all heads will turn to the Covid-19 public health measures that are expected to be more stringent today. With the prospects of economy recovery remain clouded by the rising number of Covid-19 cases, we think that the lower liners may continue to remain under pressured over the near term on mounting concerns over the disruption of supply chain with numerous factories and retail outlets were temporary closed.
market pulse

Re-capturing 1,600

Following the rebound yesterday, we believe that the local bourse is now attempting to find stability as investors bargain hunt and nibble on beaten down stocks. While there are signs of return in foreign funds, we remain cautious amid the negative market undertone as the number of new Covid-19 cases in Malaysia surpassed 3,000 mark yesterday. The lower liners are expected to remain in the purple patch, though we do not discount the possibility of rotational play may take precedence amid the improved trading liquidity.
market pulse

Marred by political uncertainty

It was another lacklustre performance on the FBM KLCI as sentiment was largely dented by the renewed political uncertainty. With the volatility has yet to abate, we reckon that the sentiment will remain largely indifferent over the foreseeable future. At the same time, the elevated new cases of Covid-19 will continue to pile pressure on the pace of economic recovery as the prospects of more stringent measures on the CMCO being discussed. The lower liners will also remain choppy as traders are opting to keep their trades on a shorter time frame to reduce exposure to the volatile market environment.
market pulse

Rebound in store

Bargain hunting activities emerged on the FBM KLCI as the key index returned into the positive territory in the second half of the trading session, lifted by gains in glove heavyweights. We reckon that further recover is in store as investors may start to accumulate on the beaten down gloves stocks. Gains, however, is expected to be limited by the high number of new Covid-19 cases that may continue to pose a hurdle for a smooth economic recovery. Elsewhere, the lower liners may creep higher on the back of the rotational play amid the returning of risk appetite into the equities market.
market pulse

Volatility persists

Although there were signs of recovery at the start of the trading bell, stocks across Bursa Malaysia were hammered by the uplift of regulated short selling activities. For now, we think that the volatility may persist, taking cue from the selldown on Wall Street overnight. On a brighter note, the recovery in Malaysia Manufacturing Purchasing Managers’ Index (PMI) may provide some cushion to further weakness. Meanwhile, we also think that the lower liners may continue to endure further profit taking as investors risk appetite dwindled due to the rising number of Covid-19 cases.
market pulse

Welcoming 2021

After recording 2.4% YoY gain in 2020, we reckon that the FBM KLCI is poised for further upsides moving into 2021. The extended gains will largely be dictated by the pace of economic recovery, coupled with the roll-out of Covid-19 vaccine progress in Malaysia. Coming closer, bargain hunting activities may emerge from the previous session selldown, but gains are likely to be tepid owing to the surge in number of new Covid-19 cases reported. We also expect the lower liners to march higher, driven by the resumption of improve trading liquidity.
market pulse

FBM KLCI may rebound higher

With the US stock markets closing marginally higher, coupled with the year-end window dressing activities, we expect trading interest on the local exchange will be positively skewed for the final day of 2020. Meanwhile, we believe Brent oil price may trade firmer on the back of greater-than-expected oil inventory draw of 6.1m barrels for the week ended 25th Dec. Besides, we opine market players may focus on recovery themed stocks given more countries allow vaccine for emergency use.
market pulse

FBM KLCI may be supported along 1,620

Wall Street ended in the negative territory after hitting the record highs throughout the session may set a mixed tone on the local front, but the FBM KLCI could be supported by mild window dressing activities. On the broader market, traders could focus on the automotive segment on the back of the SST exemption extension until mid-2021. Meanwhile, crude palm oil price remains firmly on the upward trend (RM3,550 as of yesterday closing). Also, we believe traders may anticipate that the LSS4 contracts to be awarded by 1H2021.
market pulse

FBM KLCI may revisit 1,660

With the US stock markets trended towards the all-time-high region as well as yearend window dressing activities, we expect the buying support to persist on the local stock exchange. Meanwhile, traders may focus on the stronger-than-expected November exports numbers, which could lift export related sectors. Also, Pharmaniaga’s vaccine distribution news is likely to spur interest within the logistic companies. While we believe the rising commodities prices may support the steel related counters, the upside might be limited after several rounds of rally over the past few weeks.
market pulse

Window dressing activities to persist

Heading into the final week of 2020, we believe the market may still focus on window dressing activities, but upside could be limited given the new Covid-19 variant that is haunting the reopening of the major economies. Meanwhile, market participants may lookout for trading ideas along the construction and building materials sectors on the back of ongoing and new infrastructure projects that will be expected moving into 2021 as well as rising commodities (copper, iron, aluminium and etc) prices. Besides, crude palm oil price has hit multi-year high which could translate to firmer corporate earnings.
market pulse

Recovery-themed stocks may trade higher

We expect the positive momentum on the local front could sustain today ahead of the long weekend. We believe market participants are still expecting newsflow on the KL-SG HSR as well as LSS4 contracts to surface in the news media in the near term. Meanwhile, crude palm oil price has hit the multi-year high above the RM3,500 level; this could translate to firmer earnings moving forward for plantation companies. Also, health experts commented that vaccines in production would be effective against the new variant and this could rekindle trading interest on recovery-themed stocks.
market pulse

FBM KLCI could be due for a rebound

Without any fresh catalyst, we expect the selling pressure to continue on the local front. However, the silver lining for today will be the commitment of vaccine rollout plan by Malaysia’s government. Meanwhile, market participants could also take part in the glove manufacturers following the new virus strain in the UK which resulted in a faster pace of infected cases. Besides, investors are waiting for HSR and LSS4 contracts to be dished out in the near term.
market pulse

KLCI may find support along 1,640

As the market was spooked by the new Covid-19 virus strain that caused another lockdown in the UK; the negative sentiment may spillover to stocks on the local front. However, we opine that the downside risk might be limited given the vaccine rollout is on the way. Investors could remain focus on the potential emergence of HSR news flow, coupled with the LSS4 that is expected by year-end. Meanwhile, focus could turn to the vaccine distribution candidates this week.
market pulse

Market may be due for a rebound

Although the US stock markets ended the week on a negative tone, we expect stocks on the local front could be due for a technical rebound after the 3-day pullback last week. We believe the KL-SG HSR and water-related stocks may remain in focus given the news on RM4bn Rasau water treatment plant calling for tender next year is still fresh. Meanwhile, we expect trading interest to rekindle in plantation sector as CPO surged and closed firmly above RM3,400 last Friday.
market pulse

Water-related stocks to focus

With the Wall Street trending higher overnight, we opine buying support may spillover towards our local front after a two-day pullback. Mainly, traders will continue to build their interest on the back of the KL-SG HSR news. Meanwhile, we think the surfacing of the RM4bn Rasau water treatment plant to be called for tender next year would spur trading interest amongst water-related counters. Besides, some of the commodities such as crude oil, CPO and gold have remained quite resilient over the past few sessions and trading interest should be noted within those sectors.
market pulse

Broader market to remain positive

With the US stockmarkets inching higher overnight, we believe stocks on the local may proceed higher, but profit taking could emerge on glove manufacturers on the back of Covid-19 cases was observed in several glove companies, which may attract profit taking activities after a two-day rebound. Meanwhile, with the ongoing market talks on the KL-SG HSR, we opine traders will continue to trade within the construction and property sector. Meanwhile, Brent oil price has surged above USD51 on the back of crude oil inventory declined by 3.1m barrels last week.
market pulse

Buying interest to return

Tracking the positive sentiment on Wall Street, coupled with the approval of third budget reading yesterday, we expect the buying interest could spillover towards stocks on the local front. Also, with the ongoing window dressing activities, the FBM KLCI could be lifted higher as funds maybe rotating back towards value and recovery themed stocks over the next two weeks. On commodities side, crude oil and crude palm oil has been traded on a firmer tone, while lumber price has shot up strongly since October.
market pulse

Profit taking activities to persist

Wall Street started the week on a mixed note amid the additional Covid-19 restrictions and it may spillover towards stocks on the local front. Also, with the recent political developments ahead of the third budget reading in the parliamentary session today, that may limit the upside potential on the FBM KLCI as well as the broader market at least for the near term. Once there is more clarity on the third budget vote, we might experience rekindling of buying interest moving forward. On a side note, the Brent oil price is hovering near the USD50 despite the new Covid-19 measures in the US.
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