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Wall of Worry Rally Amid Easing Hormuz Risks
Wed, 06-May-2026 07:44 am
by Research Team • Apex Research

Malaysian Market Review: The FBM KLCI rose 0.44% to 1,747 on Tuesday, supported by buying interest in petroleum-linked heavyweights, as crude oil prices hovered near US$110 per barrel. Market breadth turned slightly negative with 547 gainers against 597 decliners. Sector wise, Healthcare (+0.82%), Industrial Products (+0.74%) and Property (+0.67%) led gains, while Construction (-0.36%), Consumer (-0.28%) and Energy (-0.25%) were the main laggards.

 

Global Markets: U.S. equities extended gains to fresh record highs, with the Nasdaq Composite (+1.03%), S&P 500 (+0.81%) and Dow Jones Industrial Average (+0.73%) driven by sustained momentum in AI-related names, led by Intel, alongside resilient earnings delivery. Sentiment improved as the U.S.–Iran ceasefire held, easing near-term geopolitical risks despite intermittent tensions around the Strait of Hormuz. Oil prices retreated, with Brent Crude (-3%) at USD110/bbl and West Texas Intermediate (-3%) below USD103, as risk premium moderated despite tensions near the Strait of Hormuz (Yahoo Finance). European equities also advanced, with the STOXX Europe 600 (+0.70%) supported by broad-based sectoral gains as investors digested geopolitical developments. Major bourses in Frankfurt, Paris and Milan closed higher, indicating resilient regional risk appetite (CNBC). Asia markets closed lower, with the Hang Seng Index (-0.76%) amid lingering Middle East concerns. Trading was subdued as key markets including Japan, South Korea and China remained closed for holidays, resulting in thinner liquidity. (Reuters).

 

Market Outlook. The near-term market outlook remains cautious but stabilising, as investors balance improving earnings momentum against lingering geopolitical risks. Developments around the Strait of Hormuz remain fluid; while the U.S.–Iran ceasefire has eased immediate disruption risks, sporadic tensions continue to cap sentiment. Notably, comments from Pete Hegseth reaffirmed that the ceasefire “certainly holds,” with safe passage of U.S. vessels signalling improving conditions in the strait. Crude prices have moderated but remain elevated, sustaining inflation concerns. The policy backdrop stays restrictive, with the Federal Reserve maintaining a higher-for-longer stance, although easing oil prices may reduce tightening pressure. Overall, the FBM KLCI is expected to trade range-bound, with focus on earnings resilience particularly cost pass-through and margin sustainability while remaining sensitive to external developments.

 

Sector focus. We favour Technology in the near term, supported by sustained AI-driven momentum, with recent strong results from Advanced Micro Devices reinforcing sector earnings visibility across the sector. Energy remains a tactical play amid crude volatility linked to tensions near the Strait of Hormuz, while Plantation is supported via biofuel linkages

 

Technical Commentary: The benchmark KLCI index has staged a breakout above its symmetrical triangle formation, indicating further upside towards 1,777 and confirming a continuation of the broader uptrend after a three-month consolidation phase. Immediate support is pegged at 1,722.

 

Company News 

Public Bank Bhd, the country's third largest bank by assets, said it sees no immediate impact from the ongoing Middle East conflict, stressing that the group's asset quality remains stable. (The Edge)

 

CIMB Group Holdings Bhd is selling its Thai unit’s automotive financing portfolio as part of its strategy to exit non-core businesses and reallocate capital for growth across its Asean franchise. (The Edge)

 

Gamuda Bhd said its 45%-owned Upper Padas Power Sdn Bhd (UPPSB) has received a revised approval from the Energy Commission of Sabah for the Ulu Padas Hydroelectric Project, which has now been upgraded into an integrated hydro and floating solar energy project. (The Edge)

 

NexG Bhd has dismissed concerns regarding its operations and governance, saying all of its corporate exercises have complied with the bourse listing requirements, are subject to appropriate regulatory review, and, where required, approved by its shareholders. (The Edge)

 

Telekom Malaysia Bhd has extended its contract with Maxis Broadband Sdn Bhd for 2G and 4G domestic roaming and 4G multi-operator core network (MOCN) services until Sept 30, 2029. (The Edge)

 

Malaysian Pacific Industries Bhd, which provides outsourced semiconductor packaging and testing services, said its net profit for the third quarter ended March 31, 2026 (3QFY2026) declined 16% to RM33.67 million from RM40.09 million a year earlier due to higher operating expenses. (The Edge)

 

Hartalega Holdings Bhd’s net profit for the fourth quarter ended March 31, 2026 (4QFY2026) more than doubled to RM40.47 million from RM14.48 million in the same quarter a year earlier amid tighter cost controls and enhanced operational efficiencies. (The Edge)

 

Magni-Tech Industries Bhd, which manufactures garments as well as flexible plastic and corrugated packaging products, is acquiring a prime parcel of beachfront land in Tanjong Bungah, Penang, for RM133.33 million in cash to support its move into property development. (The Edge)

 

Capital A Bhd is in talks with a major hotel chain to extend its AirAsia brand into the hospitality sector. The group is currently finalising a licensing agreement for the venture that will be parked under AirAsia Next. (The Edge)

 

Rivertree STF Synergies Bhd is acquiring two Kuala Lumpur-based property development companies for a total of RM46.3 million from its major shareholder and executive director Datuk Leong Sai Mun, as part of its strategy to expand its property business into the serviced apartment portfolio. (The Edge)

 

Sealink International Bhd, an offshore support vessel builder and operator, said it will receive US$17.28 million (about RM68.47 million) in settlement and insurance claims over its vessel that was damaged in a fire incident in May last year.(The Edge)

 

Ann Joo Resources Bhd has secured a RM37.4 million contract for a battery energy storage system (BESS) project in Bukit Kayu Hitam, Kedah. (The Edge)

 

 

Sentiment: Positive
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