Bursa Malaysia's rally continues to gain momentum

KUALA LUMPUR: Bursa Malaysia trends higher during Monday's midday break, echoing the positive sentiment seen in many regional markets.

The 30-stock index advanced 12.28 points, or 0.76% to 1,628.90 at midday after rising to an intra-morning high of 1,629.81.

Market breadth was positive as gainers overpowered the losers on a ratio of 842-to-378 stocks. Traded volumes stood at 4.6 billion shares worth RM2.3bil.

According to MIDF Research, foreign investors continued buying on Bursa Malaysia for the fourth week, but at a slower pace of RM873.9mil, down from RM961.1mil last week.

This has reversed the year-to-date foreign outflows, turning them into a net inflow of RM4.9mil.

Among the gainers on Bursa Malaysia, Malaysian Pacific Industries surged RM3.08 to RM39.68, Arka jumped 33 sen to RM2.35, Hong Leong Industries added 32 sen to RM11.40 and Nestle gained 30 sen to RM129.80.

Allianz slid 36 sen to RM23.02, Heineken fell 34 sen to RM25.26, Dutch Lady lost 26 sen to RM32.74 and F&N declined 16 sen to RM33.20.

Hong Leong Investment Bank Research noted that after a strong 81-point surge (5.2%) in the second quarter to date (YTD: +162 points/11.1%), the KLCI may experience some volatility in the short term as investors assess the crucial May reporting season in the final two weeks.

“Nevertheless, we are cautiously optimistic that the index will revisit 1,626-1,646 zones after breaking out of its 8-day consolidation, underpinned by increased foreign inflows for the fourth consecutive weeks, a recovering ringgit, Fed’s rate-cut optimism, undemanding KLCI CY25 P/E at 13.5x (vs 10Y average 18.5x), coupled with political stability and ongoing economic and fiscal reforms to foster long-term growth and competitiveness,” it said.

Meanwhile, TA Research remarked that after the FBM KLCI reached a new high last Friday, short and medium-term momentum indicators are becoming increasingly overbought, indicating that a correction due to profit-taking is imminent.

“However, given the strong uptrend momentum backed by robust buying support from foreign and local institutional players, more upside is in the cards going forward.

“Moreover, the stronger-than-expected 1Q GDP of 4.2% should spread optimism on the recovery pace for our domestic economy for the rest of the year and encourage more investor commitments into the local stock market,” it said.

“On the index, a break above 1,620 will accelerate gain towards the next hurdle at 1,640, with 1,660 and then 1,680 as tougher upside hurdles ahead. Immediate uptrend support is now at 1,600, with 1,580, 1,566 and 1,538, the respective rising 30-day, 50-day and 100-day moving averages, acting as strong supports,” TA said.

Reuters reported that Asian shares started the week by rallying two-year highs on Monday, buoyed by China's strongest measures yet to address its property crisis and by expectations for global rate cuts within weeks, while the dollar steadied after a weekly drop.

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FBM KLCI , Bursa Malaysia , KLCI


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