Kenny Yee, Head of Research for Rakuten Trade Research Team predicted that the MYR will be at 3.80 to 3.90 due to strengthening of Chinese RMB as a result of the new administration of the United States.
He also mentioned that the availability of vaccine for Covid-19 is looking imminent. “We believe ongoing recovery mode to continue with Financial, Plantation and Tourism related sectors in the forefront.”
He explained that the prevailing foreign shareholding is at a multi-year low of below 12 percent from averaging the 20 percent attributed to a record net foreign outflows of almost RM24 billion year to date.
“On a positive note, the remaining foreign shareholding on Bursa Malaysia displays low possibility of another massive net foreign outflow. Therefore, the propensity of net foreign inflows in 2021 is high,” he shared.
Kenny said that to date, funds flow into the local stock market from local retailers has risen by almost 4 folds compared to 2019 average. “As a result, the local stock market experienced a surge in daily trading volume averaging 7.0 billion shares (Feb-current) from 2.5 billion shares in 2019 (+179 percent).”
Rakuten Trade recovery picks includes:
- Successful development of vaccines will lift the cross-borders travel restriction and worldwide travel ban. Share price is in consolidation mode now following the previous run, we expect buying momentum to resume as it is one of the potential recovery plays.
- Expect earnings recovery moving forward – Genting Plantation on rising CPO price and Genting Singapore due to well-controlled Covid-19 cases in the country. Chart-wise, share price is trading above all key moving averages line which is a good sign.
- Airline traffic is expected to pick up gradually in tandem with lifting of travel ban once the successful development of vaccine. Share price has retraced from recent high of RM5.94, hence current level offers accumulation opportunity for recovery play.