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Local
Tech Strength Offsets Broader Caution
Thu, 14-May-2026 07:45 am
by Research Team • Apex Research

Malaysian Market Review: The FBMKLCI fell -0.24% to 1,746.31 on Wednesday. Market breadth turned negative with 604 decliners outpaced 583 gainers. Sector wise, Technology (+2.24%), Construction (+1.15%) and Transportation & Logistics (+0.56%) led gains, while Telecommunications & Media (-1.01%), Plantation (-0.90%) and Healthcare (-0.80%) were the main laggards.

Global Markets: U.S. equities continued to climb, with the S&P 500 (+0.58%) and Nasdaq Composite (+1.20%) closing at fresh record highs, as robust gains in technology and semiconductor stocks outweighed concerns over hotter-than-expected inflation data. The rally was driven by AI-related counters, with Nvidia and Micron Technology posting strong advances amid sustained optimism surrounding structural AI demand and improving sentiment on potential U.S.–China semiconductor cooperation. Despite the strong performance in equities, broader market sentiment remained cautious as elevated energy prices linked to the Iran conflict continued to stoke inflation concerns, weighing on more cyclical sectors such as banking and retail. U.S. producer prices rose 1.4% in April, marking the sharpest monthly increase since March 2022 and reinforcing expectations that inflationary pressures could remain persistent in the near term. European equities also rebounded, with the Stoxx 600 rising 0.79% as easing concerns over U.K. political instability and lower gilt yields improved investor sentiment. Markets were further supported by encouraging corporate earnings and optimism surrounding upcoming discussions between Donald Trump and Xi Jinping, although ongoing U.S.–Iran tensions and elevated inflation risks continued to temper broader risk appetite. Meanwhile, Asian markets closed broadly higher, led by gains in the Kospi (+2.53%), Shenzhen Composite Index (+1.67%) and Nikkei 225 (+0.84%), reflecting improved regional sentiment.

Market Outlook. We expect the FTSE Bursa Malaysia KLCI to remain range-bound with a cautious upward bias in the near term, supported by improving regional sentiment and continued strength in technology-related counters. However, the negative market breadth and weakness in defensive heavyweights such as telecommunications and plantation stocks suggest that broader market participation remains selective, which could limit upside momentum. Externally, record highs in the S&P 500 and Nasdaq Composite, driven by AI and semiconductor optimism, may continue to support sentiment toward local technology names. Nevertheless, persistent inflation concerns, elevated Brent crude prices and ongoing geopolitical tensions surrounding Iran are likely to keep investors cautious and sustain volatility across global markets. For the near term, we expect investors to remain selective, favouring growth-oriented technology plays and earnings-resilient sectors, while maintaining a defensive stance amid external uncertainties and evolving macro conditions.

Sector focus. We favour Technology as the primary near-term play, supported by sustained global AI capital expenditure momentum and continued strength in semiconductor-linked names. Energy is likely to continue attracting trading interest as Brent crude remains above USD100/bbl following the collapse of U.S.–Iran talks, while the ongoing closure of the Strait of Hormuz increasingly points to a prolonged disruption rather than a near-term resolution. Consumer-linked counters face near-term headwinds from rising domestic fuel costs and policy uncertainty, after Deputy Finance Minister signalled a potential further reduction of the monthly BUDI95 quota from 200 litres to 150 litres, though he later clarified the remarks were not official government policy.

FBMKLCI Technical Outlook
Technical Commentary: The benchmark FBM KLCI has broken above its Symmetrical Triangle formation, signalling potential upside towards the 1,777 level and confirming a continuation of the broader uptrend following a three-month consolidation phase. However, the formation of an inverted hammer candlestick near the recent high suggests the index may experience near-term pullback or profit-taking activity after the recent rally. Immediate support is pegged at 1,735.

Company News
CelcomDigi Bhd’s net profit rose nearly 9% to RM418 million in the first quarter ended March 31, 2026 (1QFY2026) from RM384 million a year earlier, driven by lower operating expenses and device costs. Revenue was stable year-on-year at RM3.21 billion. (The Edge)

Sunway Real Estate Investment Trust’s net property income rose 4.6% to RM164.42 million in 1QFY2026 from RM157.19 million a year earlier, supported by stronger retail contributions and lower operating costs. (The Edge)

Pawnshop operator Pappajack Bhd posted a 44.62% jump in 1QFY2026 net profit to a record RM9.04 million from RM6.25 million a year earlier, driven by higher profit margins. (The Edge)

Dialog Group Bhd’s net profit for the third quarter ended March 31, 2026 (3QFY2026) rose nearly 10% to RM148.33 million from RM135 million a year earlier as revenue grew 20% to RM696.85 million from RM578.81 million, thanks to new engineering projects, healthy tank storage occupancy and higher oil prices. (The Edge)

At the close of YTL Cement Bhd’s mandatory general offer (MGO) for Concrete Engineering Products Bhd, its stake in the company had increased to 70.22%, up from 53.49% previously. (The Edge)

Malayan Banking Bhd has completed the issuance of RM1.2 billion in subordinated sukuk
murabahah under its sukuk programme of up to RM30 billion. (The Edge)

Port operator Suria Capital Holdings Bhd is planning to formally diversify into the power business after its consortium with Yayasan Sabah investment vehicle, Innoprise Corp Sdn Bhd, was selected by the state’s regulators for a 100MW gas power plant in Kimanis. (The Edge)

French energy giant TotalEnergies and MK Land Holdings Bhd said they have achieved financial close for a solar project in Kulim, Kedah. (The Edge)

MISC Bhd has redesignated its independent director Mohammad Suhaimi Mohd Yasin as its chairman, with immediate effect. (The Edge)

Property developer Talam Transform Bhd is set to hold an extraordinary general meeting (EGM) on Thursday, May 14, for shareholders to vote on the appointment of an auditor to review certain transactions and investments. (The Edge)

Axis Real Estate Investment Trust is acquiring a leasehold industrial property in Shah Alam for RM38 million cash in a related-party transaction. (The Edge)
 

Sentiment: Neutral
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Market Mover
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