Analyst calls for July 24
KUALA LUMPUR, July 24 — This is a selection of morning calls by local research houses for the day.
Today’s Market Preview
It is going to be a test of resilience on our Malaysian bourse today. On the chart, the benchmark FBM KLCI may be challenging the support lines of 1,635 (immediate) and 1,610 (next).
Essentially, sentiment could be hit by a wobbly external backdrop amid rising fears that the Eurozone debt crisis would deepen. In response, leading equity indices on Wall Street fell between 0.8 per cent and 1.2 per cent at the closing bell last night with the Sep month futures contract for the key DJIA still treading at a 98-point or 0.8 per cent discount to the spot rate this morning.
Hoping to buck the weak market trend on our local stock exchange today are stocks like: (a) Tanjung Offshore, which has declared a minimum tax-exempt special dividend per share of 35 sen translating to a net yield of 44.3 per cent; (b) Ekovest, after winning road widening contracts worth RM253m; and (c) MTD ACPI, as it has also clinched highway widening works valued at RM303m.
Malaysia Economic Highlights
Leading index rebounded yoy in May, pointing to an uneven improvement in economic activities ahead.
The leading index is gradually improving of late and inched higher to 2.3 per cent in May, after hitting a low in January and late 2011.
This suggests that the economy is likely to gradually improve in the months ahead, albeit unevenly and we expect real GDP to also improve gradually and expand at a slightly faster pace of 4.7 per cent yoy in 2H 2012 (+4.3 per cent estimated for 1H).
The upward bias reaffirmed by the “Long White Day” close above the USD90 resistance level last Thursday quickly evaporated as the commodity tumbled below USD90 last night. As mentioned in the last report, such false breakouts could be damaging to the rebound, and a possible precursor to the resumption of the decline that started in late Feb. It is also below the 200-day MAV line, reinforced by the “Death Cross” that occurred last month. The only positive sign at the moment is that the commodity is above the 50-day MAV, on a downward, flattening slope.
* These recommendations are solely the opinion of the respective research firms and not endorsed by The Malaysian Insider. The Malaysian Insider shall not be liable for any loss arising from any investment based on any recommendation, forecast or other information contained here.