KUALA LUMPUR (Nov 27): Local stocks showed an upward momentum as Budget 2021 was passed with a voice vote at the policy stage in Parliament yesterday after heated debates.
Malacca Securities, in its equity note, said the approval would favour the construction sector as a proxy to the budget amid the higher development expenditure.
"The healthcare will continue to fare better, while the technology sector is expected to remain upbeat as the recent batch of corporate earnings remained solid," it said.
Under Budget 2021, the government has allocated RM322.5 billion for development expenditure (DE) which will continue to be channelled to programmes and projects with high multiplier effects to promote economic growth and support the livelihood of the rakyat.
The health sub-sector remains a priority, as it will receive an allocation of RM4.7 billion or 6.8% of total DE.
On 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 upsides are likely to come by towards the immediate resistance at 1,640, followed by 1,670, while supports stood at 1,600, followed by 1,570," it said.
It said the Relative Strength Index (RSI) remains above 50, placing it under an uptrend momentum.
However, an analyst said despite the possible upward momentum of the local stocks; there has been an increase in concern that the Employees Provident Fund (EPF) would liquidate some of its assets to finance the i-Sinar programme.
"EPF has holdings in various local and foreign holdings and to finance the withdrawal that is expected to be in billions, the fastest way is by liquidation of assets," she said.
Among EPF's main shareholdings are in 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.
As at 10am, the construction index up 0.08%, healthcare index down 0.4% and technology index rose 0.45% since the opening.
On the FBM KLCI, the benchmark index slipped 0.35% to 1,606.41 after opening at 1,615.20, dragged down by selling pressure on Public Bank as it declined 28 sen to RM18.44, Maybank shed six sen to RM8.13 and IHH Healthcare Bhd down by eight sen to RM5.52.