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HLBank Research Highlights

Author: HLInvest   |   Latest post: Wed, 15 Sep 2021, 9:33 AM

 

Traders Brief - Multiple headwinds to dampen sentiment

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MARKET REVIEW

Global. Ahead of the US FOMC meeting (28-29 July) for clues on the timing of stimulus tapering, Asian markets ended lower, led by China (-2.3%) and Hong Kong (-4.1%) markets’ slide owing to regulatory clampdowns on tech, tutoring and property, coupled with surging Covid-19 cases. After falling as much as 111 pts in early trade as sentiment was soured by a further regulatory crackdown from China on companies in the mainland and caution ahead of the FOMC meeting, the Dow staged a strong rebound to end at another record high (+82 pts at 35144) in anticipation of a slew of strong quarterly earnings from the Fab 5 (i.e Apple, Microsoft, Alphabet, Facebook and Amazon) this week.

Malaysia. Tracking sluggish regional bourses and heightened worries of further delay in economic reopening owing to unabated Covid-19 cases (7D average at 14346), KLCI slid 10.9 pts to 1512.5. In terms of fund flows, foreign investors net sold RM139m (5D: - RM287m) whilst local institutions (+RM48m; 5D: +RM41m) and retail investors (+RM91m; 5D: +RM91m) were the net buyers in equities.

TECHNICAL OUTLOOK: KLCI

After falling below the 1518 (10D SMA) and 1525 (20D SMA) levels yesterday, KLCI could ease further towards the crucial 1500 psychological support. A breakdown below this support would suggest that the bears are in control again, implying more downside bias towards 1474-1490 levels. On the upside, 1525-1534-1545 will continue to act as stiff resistances for the index.

MARKET OUTLOOK

In tandem with the choppy regional markets and fears of further delay in economic reopening owing to the surging Covid-19 cases, KLCI is envisaged to maintain a sideways consolidation mode with short term key supports 1490-1500 territory. Nevertheless, we expect KLCI to nudge higher towards 1534-1545-1556 levels in the next few weeks, underpinned by the ongoing aggressive vaccination rates (daily vaccine doses administered reached another record high of 521k yesterday) to achieve the targeted 40% and 70% goal by end Aug and Sep, as well as government’s optimism that most states will move into Phase 4 of the NRP by October at the earliest. Hence, we advocate a more balanced portfolio proposition with a lean towards recovery plays. These include MAYBANK, TENAGA, SUNWAY, MRDIY, TM, UWC, VS, ARMADA, MBM, SENTRAL and FOCUSP.

Source: Hong Leong Investment Bank Research - 27 Jul 2021

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Chart Stock Name Last Change Volume 
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TENAGA 10.00 -0.18 (1.77%) 8,919,100 
SUNWAY 1.75 0.00 (0.00%) 990,500 
MRDIY 3.95 +0.05 (1.28%) 5,904,200 
TM 5.97 -0.01 (0.17%) 3,769,900 
UWC 5.56 0.00 (0.00%) 504,300 
VS 1.44 -0.01 (0.69%) 10,291,100 
ARMADA 0.44 +0.005 (1.15%) 12,728,000 
MBMR 3.22 -0.01 (0.31%) 22,800 
SENTRAL 0.87 0.00 (0.00%) 572,300 
FOCUSP 0.805 +0.005 (0.63%) 346,400 

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