Local stocks showed increasing momentum after the 2021 Budget was approved by a vote at the policy stage in Parliament yesterday after witnessing a heated debate.
Malacca Securities, in its equity note here, said the decision was in favor of the construction sector as a proxy to the budget amid higher development expenditure.
"Similarly, healthcare while the technology sector continues to excel with the corporate income announcement network remaining strong," he said.
Bernama reported that under the 2021 Budget, the government has allocated RM322.5 billion for development expenditure which will continue to be channeled to programs and projects with high multiplier effects to enhance economic growth and support the livelihoods and lives of the people.
The health-related sector continues to be a priority as it receives an allocation of RM4.7 billion or 6.8 per cent of development expenditure.
In terms of technical benchmarks, the FBM KLCI continued to gain, forming another bullish measure with the key index remaining supported above the daily EMA9 level.
"With continued positive momentum, the next rise is seen at the immediate barrier of 1,640, followed by 1,670, while support at 1,600, followed by 1,570," he explained.
It said the relative strength index (RSI) was still above 50, putting it below the uptrend momentum.
However, one analyst said although there was a possibility of rising momentum among the local market, there were growing concerns that the Employees Provident Fund (EPF) would liquidate some of its assets to fund the i-Sinar program.
"The EPF has holdings in various local and foreign holdings and to finance production which is expected to reach billions, the fastest way is to liquidate assets," he said.
Among the EPF's major shareholders 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 and Petronas Gas.
At 10 a.m., the construction index was up 0.08 percent, the healthcare index was down 0.4 percent and the technology index was up 0.45 percent since it opened this morning.
