A technical rebound by the Malaysian bourse may be on the cards following last week’s show of resilience. The benchmark
FBM KLCI fell as low as 1,444 mid-week only to find its way up again to settle at 1,454 on Friday. This is 3.3 points or 0.2%
below the prior week’s close of 1,457.
Over on Wall Street, the DJIA was down initially before rising subsequently to finish at 33,391 for a week-on-week increase of 574.1 points or 1.7%. Against a negative market breadth in four of the five days, trading activity on the local stock exchange averaged at 3.2b shares in volume and RM2.4b in value, compared with the previous week’s average of 3.4b shares worth RM2.2b.
The week ahead will see an interesting line-up of news flows. Starting the ball rolling will be the salient takeaways from two
high-profile events, namely: (i) Palm & Lauric Oils Price Outlook Conference (to be held from Monday until Wednesday),
which will provide the latest insights on the supply-demand dynamics in the oil palm industry and CPO price expectations,
and (ii) Invest Malaysia 2023 (on Wednesday). With a theme titled “Reshaping Malaysia’s Narrative: Strengthening
Resilience & Sustaining Growth”, investors will be keen to find out if there will be any pertinent policy measures to be
announced when the Prime Minister delivers his keynote address as fund managers meet Corporate Malaysia to hear the
latest stock market developments.
On Thursday, Bank Negara Malaysia’s monetary policy committee will meet with slightly more than half of the economists
polled predicting that the overnight policy rate would be kept unchanged. And on Friday, the February palm oil industry
statistics for Malaysia and the US February employment report are due for release. On the corporate front, Cape EMS – a
provider of electronics manufacturing services focussing on customers in the industrial and consumer sectors – is slated to
be listed on the Main Market (at a market cap of RM830.7m based on its IPO offer price of RM0.90 per share) on the same
day too.
Hopefully, Kenanga says the stream of news flows may bring positive vibes to attract bargain hunters following last week’s broad market weakness, as tracked by the FBM KLCI (-0.2%), FBM 70 Index (-0.4%), FBM Small Cap Index (-1.6%), FBM Fledgling Index (-2.2%) and FBM ACE Index (-2.4). For the week just ended, the worst hit sectors were healthcare (-2.6%), energy (-2.2%) and transportation & logistics (-2.0%) while utilities (+0.9%), finance services (+0.9%) and plantation (+0.6%) led the best performers.
Technically speaking, following its show of resilience lately, the FBM KLCI will strive to stay above our immediate support
threshold of 1,440. This is also where the bellwether had previously plotted a gap-up (by 4.0%) amid strong trading
volume on 24 November last year. And with both the stochastic and RSI indicators set to climb out from the oversold territory, the FBM KLCI could tread with a slight positive bias ahead, probably pulling away towards the first resistance hurdle of 1,475.
