KLCI expected to extend bargain hunting as valuations remain attractive

KUALA LUMPUR: The FBM KLCI is expected to extend its recovery on Tuesday as bargain hunting continues following the market’s weak performance last week.

The local benchmark ended marginally higher in the previous session despite a weak opening, with sentiment supported by easing tensions in the Middle East and a decline in Brent crude prices towards the US$100-a-barrel level.

The improvement in external conditions has provided some relief to investors, while recent market weakness has created opportunities for selective stock picking.

Market valuations are also viewed as relatively attractive, with the market trading below its average price-to-earnings ratio of 16.5 times.

bargain hunting

The FBM KLCI is expected to trade within the 1,665 to 1,680 range as buying interest continues.

Banking and Plantation stocks are expected to remain among the preferred sectors, reflecting continued interest in companies with established earnings and exposure to domestic and commodity-related fundamentals.

On the technical front, GCB (5102) was highlighted as an accumulation candidate, with its uptrend remaining intact as the share price stayed near its 52-week high and momentum remained supportive.

The stock was recommended for accumulation at RM1.42 to RM1.46.

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