Malaysia Market Review: The FBM KLCI retreated (-0.80%) as investors turned cautious amid escalating geopolitical tensions. Market breadth was negative as 944 decliners outpaced 258 advancers. Sector-wise, all sectors ended in the red, led by Utilities (-2.04%), Technology (-1.98%), Energy (-1.93%) and Healthcare (-1.71%).
Global Markets. Wall Street closed higher on Wednesday, with the Dow (+0.49%), Nasdaq (+1.29%) and S&P 500 (+0.78%) advancing, supported by gains in technology stocks, particularly semiconductor names, lifting the broader market. Investor sentiment was further buoyed by a series of stronger-than-expected economic data releases (CNBC). Meanwhile, oil and gas prices eased but remained well above pre-conflict levels, as shipping traffic through a key waterway near Iran continued to face significant disruptions (BBC). In Europe, the STOXX 600 (+1.37%) rebounded, snapping a two-day losing streak as investors monitored ongoing developments in the Middle East conflict (CNBC). Asian equities, however, closed broadly lower, led by declines in the Nikkei 225 (-3.61%), Hang Seng (-2.01%), and Shanghai Composite (-0.98%).
Market Outlook. Markets are likely to remain cautious in the near term as geopolitical tensions in the Middle East continue to evolve. In the U.S., lawmakers are debating a war-powers resolution aimed at limiting further military action against Iran, underscoring rising political divisions over the conflict and adding to policy uncertainty. At the same time, transatlantic tensions have also surfaced, after Spain rejected participation in the conflict despite threats from the U.S. to sever trade ties, highlighting growing geopolitical friction among Western allies. Against this backdrop, markets may continue to trade with elevated volatility, particularly as investors assess the risk of further escalation and its implications for global energy supply and inflation. Nevertheless, any signs of diplomatic de-escalation or policy restraint could help stabilise sentiment and support a gradual recovery in risk assets.
Sector focus. Pivot towards energy and export-oriented sectors amid heightened geopolitical risks and rising crude price volatility. The USD-linked exporters could gain from ringgit weakness. Meanwhile, banking and REITs remain attractive for their resilient earnings visibility and stable dividend yields.
FBMKLCI Technical Outlook
Technical Commentary: The FBM KLCI continues to trade above its prevailing uptrend line, indicating that the broader upward structure remains intact. As long as the index holds above this key support, we retain our constructive bias and expect the underlying uptrend to persist. A more cautious outlook would only be warranted if clearer reversal signals emerge, particularly a decisive break below the established uptrend support.
Company News (source: various)
The Malaysian Anti-Corruption Commission has opened an investigation paper linked to Sunway Bhd’s ongoing takeover offer for IJM Corp Bhd. The anti-graft agency is looking at whether there is an element of corruption, abuse of power or violation of governance.
NexG Bhd saw Raya Aviation Holdings, parent of cargo carrier Raya Airways, become its largest shareholder after taking control of two private companies tied to NexG’s current and former executives.
Jati Tinggi Group Bhd has bagged a contract worth RM79.86 million from Tenaga Nasional Bhd to lay 275 kilovolts double circuit underground cables for connection to a data centre in Pasir Gudang, Johor.
Velesto Energy Bhd, via subsidiary Velesto Workover Sdn Bhd, has secured two contracts from Sabah Shell Petroleum Company Ltd (SSPC) to provide maintenance services at its deepwater operations offshore Sabah.
Wasco Bhd saw Urusharta Jamaah Sdn Bhd, a special purpose vehicle under the Ministry of Finance, cease to be its substantial shareholder.
Exsim Hospitality Bhd announced a partnership with developer Majestic Gen to introduce professionally-managed accommodation in selected developments nationwide, with a potential pipeline of over 3,000 keys over the next four years.
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| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 3.928404 | 3.959975 |
| EUR | 4.573605 | 4.583156 |
| CNY | 0.570653 | 0.571269 |
| HKD | 0.502392 | 0.506464 |
| SGD | 3.077368 | 3.102333 |