The positive sentiment on Bursa Malaysia is expected to follow through on April 7, underpinned by some foreign fund buying of big capitalised stocks, banks and plantations and also a stronger ringgit.
There could be some short-term hedge funds picking up stocks on expectations of that share prices would increase and a stronger ringgit versus the US dollar.
However, the lower overnight close on Wall Street, which saw US stocks break a four-day winning streak, when a prominent analyst revived worries over the health of banks and the potential collapse of a takeover of Sun Microsystems, could also check some buying interest.
Maybank Investment Bank head of retail research Lee Cheng Hooi said he optimistic about the outlook for the market following the surge in volume and share prices, smooth transition in the country's leadership and also external factors.
He expected the buying momentum to continue, underpinned by internal factors including the smooth transition in the country’s leadership.
“The rebound is more sustainable now, rebound could last longer and it could be one to two months,” he said.
InsiderAsia said it appeared investors were determined to play up any good news while shrugging off the bad, at least for now. Perhaps some elements of greed are re-emerging following the extreme fear that had sent stocks reeling over the past few months.
“The upcoming corporate reporting season will likely determine the market’s next course of action. Investor expectations for the first quarter have been lowered significantly but management guidance will offer clues as to how the rest of the year will fare. Specifically, the market will be looking at the time frame for an expected recovery,” it said.
Meanwhile, big capitalised stocks, plantations and banks would be the stocks which could attract interest of the foreign funds, which had also entered into regional markets.
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