Malaysian Market Review: The FBM KLCI rose 1.16% on Wednesday, ending its recent decline on bargain hunting and easing geopolitical tensions, although sentiment remains cautious amid lingering global risks. Market breadth was positive, with 874 advancers versus 393 decliners. Sector-wise, Technology (+3.80%), Construction (+2.38%) and Financial (+1.88%) led gains, while Plantation (-2.10%), Energy (-1.49%) and Healthcare (-0.60%) were the main laggards.
Global Markets. Wall Street rallied sharply, with the Dow surging (+2.85%), S&P gaining (+2.51%) and Nasdaq outperformed (+2.80%), after Donald Trump announced a two-week suspension of attacks on Iran, effectively pausing the five-week conflict that had disrupted a key global energy shipping route (CNBC). In Europe, STOXX 600 advanced (+1.65%) as the temporary ceasefire sparked a broad risk-on rally, with investors turning optimistic over improving supply conditions. Meanwhile, energy markets reversed sharply, with WTI crude falling about 15% to around USD96 per barrel, as easing geopolitical tensions led to a moderation in risk premium and improved expectations of continued oil supply (BBC). Asian markets also posted strong gains, with the Nikkei 225 (+5.39%), Kospi (+6.87%), and Shanghai Composite (+2.69%) advancing, tracking the global relief rally.
Market Outlook. Markets are expected to remain cautious as the fragile ceasefire between the US and Iran faces renewed uncertainty, after Iran’s Islamic Revolutionary Guard Corps claimed that shipping through the Strait of Hormuz had halted following an alleged Israeli ceasefire violation in Lebanon, raising concerns over potential supply disruptions as the White House previously indicated the truce would hold only if the waterway remained open. Adding to tensions, the Trump administration and Israeli Prime Minister Benjamin Netanyahu clarified that the ceasefire does not extend to operations against Hezbollah in Lebanon, where Israel reportedly carried out its largest coordinated strike since the conflict began, further heightening regional instability. Meanwhile, diplomatic efforts continue with US officials set to travel to Pakistan for Iran talks, although Iranian officials have already accused the US of violating parts of the proposal, underscoring the fragile nature of negotiations and increasing the risk of renewed escalation. Further adding to uncertainty, Australia has urged that the ceasefire be extended to Lebanon, with Australian Foreign Minister Penny Wong warning that continued hostilities could undermine broader regional stability. The call was subsequently backed by the Group of Seven and other nations, highlighting mounting international concern over the fragile truce. Against this backdrop, regional markets are likely to remain cautious, with investors adopting a defensive stance amid elevated geopolitical risks and heightened headline sensitivity.
Sector focus. We favour defensive sectors such as utilities and telecommunications amid elevated geopolitical risks and market volatility. Energy may see selective support from potential crude price fluctuations, while plantations could benefit from firmer CPO prices.
Technical Commentary: The FBM KLCI rebounded strongly after briefly trading below the lower bound of the Bollinger band in the previous trading session. Further upside movement will may signal a return of constructive momentum and signal a resurgence of buying interest. Immediate downside risk now pivots to the next support at 1,665, where a break below this level would reinforce bearish momentum and indicate sustained downward pressure in the near term.
Company News
Sarawak-based construction services firm Hartanah Kenyalang Bhd flagged that rising costs linked to geopolitical tensions are squeezing margins. (The Edge)
Lim Seong Hai Capital Bhd said it has partnered with Knusford Bhd for a road upgrade project in Kuantan and secured a related subcontract worth up to RM30 million. (The Edge)
Inta Bina Group Bhd announced that it has secured a RM32.41 million construction contract for the Eco Ardence township near Setia Alam, Shah Alam. (The Edge)
Perak Transit Bhd has appointed Jeffrey Cheong Mun Kwong as its new deputy executive director. In a statement, the transport and terminal operator said Cheong will lead initiatives aimed at integrating retail and digital commerce elements into existing infrastructure. (The Edge)
Talam Transform Bhd will convene an extraordinary general meeting (EGM) by the end-June for shareholders to vote on the appointment of a forensic auditor. (The Edge)
Focus Dynamics Group Bhd saw its external auditor Nexia SSY PLT resign due to a disagreement over fees. (The Edge)
Mayu Global Group Bhd has acquired the remaining 20% stake in property arm Sunrise Manner Sdn Bhd (SMSB), making it a wholly-owned subsidiary. (The Edge)
PMW International Bhd has signed a share subscription and shareholders’ agreement with Sarawak Timber Industry Development Corporation (STIDC) to develop a concrete piles and poles manufacturing facility in Tanjung Manis, Sarawak. (The Edge)
Industrial chemicals distributor Eckem Holdings Bhd has signed an underwriting agreement with M&A Securities for its initial public offering (IPO) and proposed listing on the ACE Market. (The Edge)
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| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 3.959605 | 3.991569 |
| EUR | 4.638399 | 4.647989 |
| CNY | 0.581733 | 0.582362 |
| HKD | 0.505472 | 0.509561 |
| SGD | 3.104515 | 3.129807 |