MARKET REVIEW

Global. As multiple markets (Japan, Indonesia, Philippines, Singapore, Korea and Thailand) in the region were closed for New Year’s Eve, Asian bourses ended mixed on 31 Dec in quiet trades. Major gainers were the SHCOMP (+1.7% to 3473, +13.9% in 2020) and HSI (+0.3% to 27231, -3.4% in 2020) as sentiment was boosted by continued growth in China’s Dec PMI and the UK’s authorisation of the Oxford-Astra Covid-19 vaccine for emergency use. The Dow climbed 196 pts to end at a record close 30606 (+7.2% in 2020) amid lower weekly jobless claims and renewed vaccine optimism, overshadowing the nearterm challenges posed by the pandemic and a rapidly spread new UK Covid-19 strain.

Malaysia. KLCI ended 2020 on a disappointing note, sliding 17.2 pts to 1621.7 (+2.4% in 2020) as investors continued to pare down positions ahead of the resumption of RSS on 1 Jan and the important KL-SG HSR announcement coupled with the knock-on repercussions on our economy due to the resurgence of Covid-19 cases and clusters in Malaysia. Market breadth was negative as losers thumped gainers 620-474 with about 5.5n shares traded valued at RM3.1bn.

TECHNICAL OUTLOOK: KLCI

Following the multiple breakdowns of 10D/20D/30D SMA supports, we expect KLCI to extend its near term consolidation, with key supports situated at 1600 -1618 zones. A fall below 1600 will trigger further selldown towards 1588 (50D SMA) and 1557 (100D SMA) levels. Towards the upside, the critical resistances are pegged at 1644-1684 levels.

MARKET OUTLOOK

With the resumption of RSS and the termination of KL-SG HSR announcement coupled with the unabated Covid-19 infections and new clusters in our country, KLCI is expected to extend its consolidation following the multiple breakdowns of 10D/20D/30D SMA supports last week. Nevertheless, we remain cautiously optimistic that the downside is likely to be supported near 1600 levels, underpinned by the multiple Covid-19 vaccine breakthroughs, a combination of continuing fiscal and monetary stimulus coupled with the low -interest rates environment.

VIRTUAL PORTFOLIO POSITION-FIG1

In the wake of the market uncertainty and volatility, we decided to square off SUNWAY on 31 Dec 2020 with a 12.7% gain.

Source: Hong Leong Investment Bank Research - 4 Jan 2021