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TA Research: Buying momentum sustainable but at weaker pace

KUALA LUMPUR: Investors’ anticipation of a rally in the FBM KLCI during the pre-Budget 2022 period has become a self-fulfilling prophecy that has propelled the benchmark index higher almost 71% of the time since the Asian Financial Crisis.

TA Research said in its strategy report the rally started much earlier this year because of the positive news flows from abroad and the economic recovery optimism following the relaxation on interstate travel and reopening of international borders.

“The benchmark index has rallied 86.12 points from a low of 1,515.54 on Oct 5 to a high of 1,601.66 points on Oct 14 and may continue to advance in this holiday-shortened week, albeit at a slower pace as profit taking pressure increases,” it said.

To recap, the KLCI hit a fresh six-week high last week, buoyed by economic reopening optimism following the relaxation on interstate travel and reopening of international borders.

Profit-taking due to overbought momentum mid-week was well absorbed, with strong bargain hunting interest in property and construction related stocks cushioning falls.

Week-on-week, the KLCI climbed another 34.38 points, or 2.2%, to 1598.28, as gains on key banking stocks Public Bank (+12 sen), CIMB (+25 sen), Maybank (+23 sen) and RHB Bank (+42 sen) overshadowed falls in Top Glove (-2 sen), PPB Group (-12 sen) and IOI Corp (-1 sen).

TA Research said average daily traded volume last week improved to 5.14 billion shares compared to the 4.28 billion shares the previous week, while average traded value rose to RM3.32bil, against the RM3.04bil average the previous week.



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