MARKET REVIEW

Global. Mirroring Wall St’s rally overnight, Asian markets ended higher in anticipation of Russia-Ukraine ceasefire talks’ optimism and more clarity from Fed’s rate hikes trajectory coupled with Beijing’s strong push to stabilize China’s economy and financial markets, overshadowed the economic fallout from the Russia-Ukraine war and resurgent Covid-19 outbreaks in China. Overnight, the Dow recorded its 4th day of relief rally (+417 pts to 34,480) as investors mulled the Fed’s hawkish rhetoric policy and the Russia-Ukraine talks after Russia downplayed progress on peace talks with Ukraine.

Malaysia. Tracking rally in Wall St and regional markets’ rally, KLCI jumped 19.6 pts to 1,590.9.3, led by bargain hunting activities on PBBANK, CIMB, HARTA, TOPBLOV, MAYBANK and PCHEM. Market breadth was bullish with 756 gainers thumping 296 losers. In terms of funds flow, foreign investors net bought RM261m trades (YTD: +RM5.56bn) whilst local institutions and retailers net sold RM115m (YTD: -RM5.87bn; 30th session of Straight Exodus) and RM146m (YTD: +RM309m) Shares, Respectively.

TECHNICAL OUTLOOK: KLCI

Following the 4.9% or 79 pts slide from YTD high of 1,620 to a low of 1,541, the index managed to stage a solid recovery to end at 1,591 yesterday. Tracking Wall St’s rally overnight and the bullish three outside up formation, we expect KLCI to retest 1,600 levels, before heading to a more formidable hurdle at 1,620 in the short term. Key downside supports remain at 1,577 (30D MA), 1,565 (38.2% FR) and 1,545 (200D MA) zones.

MARKET OUTLOOK

Tracking further relief rally from Wall St, KLCI could inch higher to retest 1,600-1,620 levels but cautious sentiment prevails, as investors continue to weigh on the slow progress in Russia-Ukraine ceasefire talks, FOMC’s latest hawkish tilt policy coupled with worries over the Covid-19 situation in China. However, with our Malaysian bourse still showing resilience in the face of increased foreign net inflows (29th session of straight net inflows; YTD: +RM5.56bn; 2021: -RM3.02bn), high crude oil and CPO prices, as well as our nations’ shift into endemic phase and reopening of international borders on 1 April, any pullback is likely to be cushioned near 1,530-1,545-1,565 territory.

VIRTUAL PORTFOLIO POSITION

We Took Profit on FRONTKN (14.1% Return) Yesterday After Hitting Our R1 Target.

Source: Hong Leong Investment Bank Research - 18 Mar 2022