MARKET REVIEW

Asia/US. Awaiting more cues on the US economy from a string of Fed speakers and US economic data due this week, Asian markets ended mixed as investors weighed on dovish signals from the BOJ as monetary policy remained accommodative in the country after maintaining its current range of yield curve control, ducking market expectations for more widening in the bank’s policy. The Dow tumbled 614 pts to 33,297 (its 2nd straight decline) following the strong January gains (1,155 pts from 3-16 Jan), as sentiment was dampened by sluggish Dec economic data (e.g. retail sales, industrial output, and PPI) coupled with hawkish remarks by Bullard and Mester.

Malaysia. Ahead of the BNM meeting today and long CNY holidays (22-24 Jan), KLCI fell 3.9 pts to 1,495.5. Market breadth (gainers/losers ratio) stayed negative at 0.91 vs +1.01 a day ago. Foreign institutions turned net sellers again (-RM114m, Jan: -RM62m) followed by local retailers (-RM15m, Jan: -RM339m), which recorded their net outflows for the eight consecutive session. Meanwhile, local institutions resumed their net buying for the seventh session out of eight (+RM129m, Jan: +RM401m).

TECHNICAL OUTLOOK: KLCI

As long as KLCI holds up above the support trend line (near 1,483) and 200D MA (1,488 now), we reckon the bulls will have the upper hand to retest 1,500-1,528 in the short term. Conversely, a decisive break down below the support trend line would trigger a selloff towards 1,454-1,468 zones.

MARKET OUTLOOK

Tracking back-to-back slide from Wall St and ahead of the BNM monetary decision today, KLCI may trend sideways ahead of the long CNY holidays. Technically, KLCI may continue to nudge higher to retest 1,500-1,512-1,528 hurdles (supports: 1,468-1,482), barring any decisive fall below the support trend line (near 1,483) and 200D MA (1,488 now).

Source: Hong Leong Investment Bank Research - 19 Jan 2023