Daily Market Reports Issued By Rakuten Trade Research : Page 201

Undented by the virus fear, Wall Street closed on a positive note on the back of improved earnings. Nonetheless, we believe this could be short lived as sentiments may eventually be affected by fears of the pandemic.
We expect regional markets to readjust itself following a sell-off over the last few days and possibly some buying would prevail.
Locally we expect the selling to ease with the FBM KLCI to test the 1,550 level and maybe it’s time to look at laggard healthcare stocks namely Pharmaniaga, KPJ Healthcare and Caring.

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With the virus still dominating headlines, most investors were sidelined amid a plethora of corporate results on Wall Street.
It is also interesting to note that a large chunk of funds went into the US 10-year treasury as the yield touched below the 1.60% from around the 1.90% at the start of this year.
Therefore, we reckon interests on equities to remain low with the FBM KLCI to hover within the 1,550/1,560 range.
Meanwhile, CPO price staged a rebound to above RM2,700/MT following a sharp decline recently and consensus are having some mixed views of the commodity at the moment.
We are Neutral on the sector.

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Wall Street staged a relief rebound but we reckon it is insufficient to prop regional markets up to recoup yesterday’s losses. With sentiments still affected by the virus, investors may opt to wait and see on how the situation pens out.
Nonetheless, we believe the FBM KLCI to see a mild uptrend with 1,560 as the immediate resistance. As usual, glove makers benefitted during such crisis as demand would have heightened.
Meanwhile, CPO price slumped to around the RM2,600/mt level fearing the virus may affect demand coupled with the import ban by India.

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Not going to be an auspicious start for the regional stock markets today. The spreading of the Wuhan coronavirus had investors scurrying for cover as many unloaded their position pushing the DJI Index 420 points lower.
Meanwhile, crude oil price also retreated citing the virus may impact negatively on demand with the Brent crashed through the US$60 level to close at US$58.58/barrel.
Looking at a plethora of adverse developments, we believe trading on the local bourse to be muted with the FBM KLCI facing some downward pressure with support seen at 1,560 today.

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Market participation is expected to be rather muted today amid a shortened trading hour.
With Bursa Malaysia closed for CNY celebration until Tuesday, we reckon the FBM KLCI to hover within a tight range of between 1,570/75 today.
Meanwhile, the spreading of the coronavirus may be added dampener for the regional markets.
All in all, we believe the local bourse to remain rather docile.

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