MARKET REVIEW

Global. Asian markets ended lower as China continued to crackdown its gaming industry through temporarily freezing new games approvals, as well as expectations that the ECB would start to slow down the pace of its asset-purchase program. Overnight, better-than expected weekly jobless claims report capped the Dow losses to 151pts at 34879, as market is engaged in profit taking consolidation amid growing fears of a slowing economic recovery as well as waiting for more clarity on the Fed’s next move to scale back its accommodative policies timeline. Key event to monitor tonight is the Aug PPI data.

Malaysia. KLCI plunged 18.74pts to end at 1578.9 yesterday, tracking the lacklustre overnight global stocks performance as well as the strong selling pressure in healthcare stocks. Market breadth remain negative as 747 losers led 338 winners, with a total of 4.1bn shares worth RM2.9bn were traded amid strong selling pressure across the board. In terms of fund flows, foreigners’ ended their 12th consecutive session of buying spree, with a net disposal of RM63m whilst local institutions’ selling momentum continued for a 12th

consecutive days amounting to –RM67m. On the other hand, local retailers were the only net buyer (for the 7th straight day) amounting to RM129m.

TECHNICAL OUTLOOK: KLCI

KLCI closed 18.7pts lower to end at 1578.9 yesterday, below its key 200D SMA (1583). Following the sharp fall yesterday and weakening technical oscillators, KLCI is expected to remain choppy, with major supports situated at 1550-1564 territory. Topside, stiff resistances are pegged at 1605-1623 zones.

MARKET OUTLOOK

Despite intermittent profit taking consolidation after rallying from 1483 (YTD low), overall sentiment is expected to hold up well amid hopes of easing political risks and confidence in policy continuity, economic reopening gaining tractions, coupled with sustained influx of foreign funds (+RM1.7bn since end July). As China continues its “Common Prosperity” crackdowns on a few targeted industries, more outflows from the China/HK markets are likely to prevail in the near term and Bursa Malaysia is likely to remain as one of the beneficiaries (KLCI: -3% YTD). With domestic institutional funds still remain net sellers (- RM2.3bn since end July), further external inflows may see the local institutional funds to play catch up. Major supports are pegged at 1550-1564 whilst resistances are near 1605- 1623 levels.

Source: Hong Leong Investment Bank Research - 10 Sept 2021