Global. Bucking the bullish Wall St closing, Asian bourses ended mixed as the positive China Markit manufacturing PMI was overshadowed by another fresh measure from China’s cyberspace regulator that internet platforms with data for more than 1 million users will need to undergo a security review before listing overseas from 15 Feb. Dow booked its 2nd record close of 2022 (+0.6% to 36799), led by cyclical and value stocks as investors looked past the weak ISM PMI manufacturing index and fresh record high Covid -19 cases. Meanwhile, Nasdaq 100 plunged 1.3% to 16279 as multiple headwinds from the skyrocketing Covid-19 cases, lingering supply chain disruptions, and higher US 10Y bond yield dampened the appetite for growth stocks.
Malaysia. The KLCI fell 7.2 pts to 1541.9, recording its 2nd day of post window-dressing pullback to correct short term overbought momentum as investors assessed the reintroduction of IDSS and PDT short sale as well as the revision on higher contract stamp duties capped at RM1000. Market breadth stayed positive with gainers leading losers 524 to 383. Turnover and value rose 28% and 33% to 3.52bn shares worth RM1.93bn, respectively.
As expected, KLCI continued its profit-taking pullback for a 2nd straight session after rallying 6.5% or 92 pts from 1475 (15 Dec low) to 1567 (31 Dec high). The index may continue to find its footing in the coming days with major supports situated at 1520-1528 levels to digest the recent gains. On the upside, any residual strength is likely to experience stiff hurdles at 1580-1600-1613 barriers.
The recovery scenario will continue to unfold into 2022, as a new growth cycle emerges following Malaysia’s high vaccination rates and elevated FCPO and oil prices (as OPEC+ agreed with an oil output hike from Feb). However, we see increased volatility amid the reintroduction of IDSS and PDT short sale, the emergence of new Covid-19 variant ‘IHU’ (studies showed more mutations than Omicron), fluid domestic politics and the impact on sector/corporates after widespread flooding in many states in Peninsular Malaysia. Key supports are pegged at 1500-1520-1528 whilst stiff resistances are situated at 1580-1600- 1613 levels.
Source: Hong Leong Investment Bank Research - 5 Jan 2022
Created by HLInvest | Jul 19, 2024