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Gains expected from surprise U.S. Treasury announcement
Thu, 20-Aug-2026 10:04 am
by Research Team • Apex Research

Malaysian Market Review. The FBM KLCI fell by 2.04 points, or 0.12%, to close at 1,731.32. Market breadth remained negative, with 701 losers against 478 gainers, while 563 counters were unchanged. The market weakness was evident in growth stocks, reflecting pressure from higher US Bond yields. Sector-wise, Telecommunications (+0.55%) and Healthcare (+1.15%) were the main gainers while Construction (-1.22%) and Technology (-1.57%) were the main laggards.

  

Global Markets: The S&P 500 rose 0.21% to 7,707.98 and the Nasdaq Composite rose 0.16% to 26,331.09. The Dow Jones Industrial Average rose 0.22% to 53,463.05. The gains were attributed to a surprise announcement from the U.S. Treasury which announced the doubling of the size of its liquidity-support buyback operations for longer-dated Treasury securities, from $2 billion to $4 billion per operation (Reuters). Consequently, bond yields fell, alleviating concerns about high borrowing costs. In other news, the US FOMC Minutes for July 28-29 indicated that most participants supported keeping rates unchanged although some argued that higher rates may be necessary should inflation stay elevated. Overall, the Minutes point towards an increasing focus on inflation persistence (Reuters). The pan-European STOXX 600 fell 0.11% to 651.16 with inflationary concerns outweighing the relief from a decline in European bond yields after the U.S. Treasury’s announcement. In Asia, markets closed negative with Japan's Nikkei 225 falling 3.16%, the KOSPI Index falling 5.80%, and the Shenzhen Index falling 5.01%.

 

Market Outlook. The Malaysian market is expected to trade with a cautiously positive bias, supported by the overnight rebound on Wall Street and easing U.S. Treasury yields. The U.S. Treasury’s decision to double the size of its liquidity-support buyback operations for longer-dated securities helped push bond yields lower, providing some relief to equity valuations, particularly growth and technology stocks. Globally, sentiment is likely to remain supported by the U.S Treasury’s announcement with lower bond yields being supportive for technology and other growth- related counters. However, this is somewhat tamed by elevated oil prices and the ongoing Middle East developments.

 

Sector focus. Growth-related counters, particularly Technology and Construction, are expected to benefit from lower sovereign bond yields, which should provide some support to valuations and borrowing costs. Plantation counters should remain supported by firm commodity prices. Overall, we expect a balanced sector performance, with growth sectors benefiting from the softer yield environment while Plantation counters offer earnings support from resilient commodity prices.

 

Technical Commentary: The FBM KLCI has been hovering around its 9- and 20-day moving averages, reflecting indecision within its prevailing downward channel. Repeated rejections at the 1,750–1,760 zone suggest that sellers remain firmly in control of this resistance area. A break below 1,720 could trigger a deeper pullback towards the 1,700 support, with 1,680 emerging as the next key support level if profit-taking intensifies. The outlook would turn more constructive only if the index decisively breaks above 1,750.

 

Company News

Solarvest Holdings Bhd’s first-quarter net profit saw a 19.8% jump to RM19.02 million from RM15.88 million a year ago, mainly due to higher share of profits from associate companies. (The Edge)

 

PETRONAS Chemicals Group Bhd returned to the black with a second-quarter net profit of RM414 million, compared to a net loss of RM1.08 billion in the same quarter last year when the petrochemical company booked foreign exchange losses and wrote down the value of assets at its Swedish specialty unit Perstorp. (The Edge)

 

Lotte Chemical Titan Holding Bhd said no decision has been made by its South Korean parent amid news reports of a potential disposal that triggered a spike in its share price. (The Edge)

 

Electrical engineering firm CBH Engineering Holding Bhd’s second-quarter net profit rose to RM24.53 million from RM10.1 million a year earlier, while revenue doubled to RM120.93 million from RM59.68 million. (The Edge)

 

S P Setia Bhd posted a net profit of RM98.1 million for the second quarter ended June 30, 2026 (2QFY2026), as opposed to RM99.8 million a year earlier. (The Edge)

 

Hong Leong Industries Bhd reported a 22.6% year-on-year increase in its fourth quarter net profit to RM143.59 million from RM117.16 million. (The Edge)

 

UEM Sunrise Bh more than doubled its second-quarter net profit to RM46.85 million from RM22.41 million a year earlier, as higher revenue recognition from property developments and a land divestment lifted earnings. (The Edge)

 

Pekat Group Bhd posted record-high second-quarter earnings of RM14.19 million, compared with RM11.02 million a year earlier, as all of its business divisions generated stronger contributions.  (The Edge)

 

Genting Plantations Bhd's net profit for the second quarter fell 27% from a year earlier, dragged by lower crude palm oil (CPO) prices and an absence of disposal gain.  (The Edge)

 

Pure-play bus builder Bus Cap Bhd has signed a memorandum of understanding (MOU) with BYD Malaysia Sdn Bhd, a local unit of Chinese conglomerate BYD, in Shenzen, China, to formalise a collaboration to jointly advance a Malaysia-based new energy commercial vehicle platform.  (The Edge)

 

Plantation company TSH Resources Bhd's second-quarter net profit rose 6.7% to RM52.51 million from RM49.23 million in the same quarter a year ago on better extraction rates, lower costs and stronger joint-venture contributions.  (The Edge)

Sentiment: Positive
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