Market Review

Malaysia: The FBM KLCI (-0.4%) snapped a seven day winning streak amid the profit taking activities particularly in banking heavyweights ahead of the extended weekend break. Still, the local bourse rose 5.6% WoW to mark its fourth consecutive weeks of advance. The lower liners finished mostly lower as the FBM Small Cap and FBM ACE shed 0.6% and 1.2% respectively, while the broader market were mostly in the red.

Global markets: U.S. stockmarkets closed higher overnight as the Dow jumped 1.7% buoyed by the optimism over the pace of economy recovery, upbeat jobs data and higher crude oil prices following OPEC and its allies move to extend production cut. On the broader market, the S&P 500 (+1.2%) advanced with all eleven major sectors in the green, while the Nasdaq (+1.1%) finished a fresh record high - 9,924.75 level.

The Day Ahead

Moving forward, the slew of measures announced under the Short-Term Economic Recovery Plan may continue to provide some impetus to the market coupled with the gradual re-opening of economic activities. In the meantime, World Bank expects Malaysia’s economy recovery to begin by end of the year may provide some alleviation.

Sector focus: The tax incentives under the Short-Term Economic Recovery Plan announced on last Friday may provide some headway to the automotive, plantation and property sectors.

Despite last Friday’s pullback, losses were limited owing to quick bargain hunting on intraday basis as the KLCI is still trading on an upward trend. Hence, we think that upsides may continue towards 1,600 psychological level with an interim resistance at the 1,580 level. Support is located around 1,530, followed by 1,500 psychological level.

Source: Mplus Research - 9 Jun 2020