KUALA LUMPUR: The Kuala Lumpur Composite Index (KLCI) ended the week on a higher note, buoyed mostly by the continued technical rebound and a stronger regional performance.
At yesterday’s close, the KLCI was up 1.77 to 1,188.83 points after hitting a high of 1,201.45 in early trade.
The KLCI’s fourth day of recovery is a positive sign for the local bourse.
“Yesterday’s performance was more of a technical rebound as the market was in oversold territory. This is positive for Bursa Malaysia after the sharp correction over the past few weeks,” OSK Research Sdn Bhd head of research Kenny Yee said.
Yee said the market was currently undergoing consolidation, which presented good opportunities for retail investors to accumulate quality stocks, especially those supported by positive news flow.
“In general, Asian markets are still attractive. Fundamentally, nothing has changed (since the sell-down). Economic growth rates are still at attractive levels,” he said.
For example, Malaysia’s corporate earnings were set to see solid growth of 19.5% this year, Yee added.
His immediate resistance for the KLCI is at 1,200 points, followed by the 1,230 level.
M&A Securities head of research Wee Kim Hong said the performance of the KLCI yesterday was within expectations.
“Profit-taking activities were well absorbed. However, many investors took a ‘wait and see’ position ahead of a clearer regional performance.
“Asian markets are still regarded as the growth centre, and exposure to Asia is important,” Wee said.
He said the KLCI had so far been a laggard and its growth potential was immense.
“Compared with its Asian counterparts, the KLCI is merely playing catch up. The fundamentals of the economy and market remain intact and there are no major issues,” Wee said.
He said M&A’s immediate resistance level target was at 1,200 points while the next target was 1,250 points.
“We like defensive sectors such as plantation, power, banking and telecommunication, while thematic plays will focus on the construction, steel and timber sectors,” he said.
MIMB Investment Bank research manager (charts) Lee Cheng Hooi said the local bourse’s performance yesterday was “quiet” and “uninteresting” as most investors locked in profits ahead of the weekend.
“From a technical perspective, there is a possibility that the rebound has stalled at (yesterday’s) high of 1,201.45 points,” he added.
On the currency front, Lee noted that the ringgit yesterday rose against the yen in tandem with the rise in the US dollar against the Japanese currency.
“The local equity market followed this cross-rate movement,” he said.
The ringgit closed yesterday at 3.5025/5055 against the greenback compared with 3.5070/5100 on Thursday.
Meanwhile, stock markets in Asia closed mixed yesterday.
The Nikkei 225 gained 73.73 points to 1,7164.04 while the Hang Seng Index shed 40.29 points to 19,134.88. The Shanghai Composite Index was up 9.9 points to 2937.91, Singapore’s Straits Times finished 21.22 points higher to 3,143.71 while the KOSPI index dipped 0.31 points to 1,423.58.
US stocks rose at yesterday’s opening with the Dow Jones industrial average up 58.40 points, or 0.48%, at 12,319.10. The Standard & Poor's 500 Index was up 6.76 points, or 0.48%, at 1,408.65. The Nasdaq Composite Index was up 16.26 points, or 0.68%, at 2,403.99.
In Europe, most markets started trading on a lower note.
Did you find this article insightful?