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KUALA LUMPUR (Nov 27): Local stocks showed upward momentum as the 2021 budget was passed with a voice vote at the policy stage in Parliament yesterday after heated debates.
Malacca Securities, in its capital note, said the approval would favor the construction sector as a proxy for the budget amid higher development spending.
“Health will continue to outperform while the tech sector is expected to remain bullish as the recent batch of corporate earnings held strong,” he said.
Under the 2021 Budget, the government has allocated RM322.5 billion for development spending (DE) that will continue to be channeled into programs and projects with high multiplier effects to promote economic growth and support the livelihoods of the rakyat.
The health subsector remains a priority as it will receive an allocation of RM4.7 billion or 6.8% of the total ED.
At the technical benchmark, the FBM KLCI extended its gains, forming another bullish candle as the key index remains supported above the daily EMA9 level.
“Under the prevailing positive momentum, further leads towards immediate resistance at 1,640, followed by 1,670, while supports were placed at 1,600, followed by 1,570, are likely,” he said.
He said that the Relative Strength Index (RSI) is holding above 50, putting it under uptrend momentum.
However, one analyst said despite possible bullish momentum from local stocks; Concerns have grown that the Employee Provident Fund (EPF) would liquidate some of its assets to finance the i-Sinar program.
“EPF has stakes in various local and foreign stakes and to fund the withdrawal expected to be in the billions, the quickest way is through asset liquidation,” he said.
EPF’s main holdings include Malaysia Building Society Bhd, RHB Bank Bhd, Malaysian Resources Corp Bhd, Bermaz Auto Bhd, Telekom Malaysia Bhd, Axiata Group Bhd, Tenaga Nasional Bhd, CIMB Group Holdings Bhd, Public Bank Bhd, Malaysia Airport Holdings Bhd, Gamuda Bhd, Malayan Banking Bhd (Maybank) and Petronas Gas Bhd.
At 10 a.m., the construction index was up 0.08%, the health index was down 0.4%, and the technology index was up 0.45% since opening.
On the FBM KLCI, the benchmark index fell 0.35% to 1,606.41 after opening at 1,615.20, dragged down by the selling pressure on the Public Bank as it fell 28 sen to RM18.44, Maybank lost six sen to RM8.13 and IHH Healthcare Bhd fell by eight sen to RM5.52.
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