Malaysian Market Review. The FBM KLCI declined 18.78 points, or 1.10%, to close at 1,686.74, from Thursday's close of 1,705.52, with market breadth remaining negative as decliners outpaced gainers 809 to 427. While domestic fundamentals remain intact, sentiment was driven by external factors, with the Middle-East conflict remaining elevated and dual concerns on higher bond yields and elevated energy costs showing little signs of subsiding. Construction (-1.74%), Utilities (-1.68%), and Finance (-1.42%) led the decliners while Healthcare (+0.49%%) and Telecommunications & Media (+0.08%) were the only gainers.
Global Markets: Wall Street rebounded on Friday, with the Dow rising 0.98% to 52,573.29, the S&P 500 gaining 0.86% to 7,656.98 and the Nasdaq advancing 0.96% to 26,333.04, as a pullback in crude oil prices and strength in technology stocks outweighed renewed rate concerns. August headline CPI rose 0.4% MoM and 3.4% YoY, broadly in line with expectations, although core CPI increased a stronger-than-expected 0.3% MoM versus the 0.2% forecast. European markets also recovered, with the STOXX Europe 600 rising 0.49% to 639.1 although the benchmark still recorded its sharpest weekly decline since early July amid elevated bond yields and inflation concerns. Asian markets were weaker ahead of the US inflation release, with Japan's Nikkei 225 falling 1.93%, South Korea's KOSPI declining 1.76% and Hong Kong's Hang Seng slipping around 0.6%, pressured by elevated oil prices and global bond yields. Over the weekend, further attacks on Saudi Arabia and vessels in the Strait of Hormuz continued, while the Saudi east-west oil pipeline remained offline following drone strikes, potentially putting as much as 4% of global oil supply at risk should the outage persist.
Market Outlook. We expect the FBM KLCI to trade with a cautious to negative bias in the near term, as external headwinds continue to overshadow otherwise resilient domestic fundamentals. Renewed geopolitical tensions in the Middle East, elevated crude oil prices and higher global bond yields are likely to keep risk appetite subdued, particularly for rate-sensitive and energy-intensive sectors. While Friday’s rebound on Wall Street could provide some initial support, the weekend escalation in geopolitical risks may limit follow-through buying. Investor attention will remain focused on this week’s heavy macro and central-bank calendar. Overall, we expect market volatility to remain high, with the KLCI likely to consolidate until there is greater clarity on the trajectory of global rates and the Middle East conflict.
Sector focus. Domestically, we expect selected beneficiaries of higher energy prices to remain relatively resilient with Plantation also seeing some interest given indirect CPO price support. Conversely, Construction, Utilities and Financials may continue to face pressure should bond yields stay elevated.
Technical Commentary: The FBM KLCI slipped further on Friday to close at 1,686.74, extending its retreat from recent highs near 1,760. The index has now fallen below its EMA9, EMA20 and EMA120, a break that signals that the near-term rebound has lost momentum. The close below 1,680 should now lead to a retest of 1,665, while failure to hold that level risks exposing the index to a slide back towards the 1,640–1,645 zone. For the rebound to look more convincing, the index needs to move back above all of the EMAs. Overall, the index is still moving within the downward trend channel that has limited gains since February.
Company News
Hextar Industries Bhd's RM177.48 million deal with Woodpeckers Group Sdn Bhd has fallen through after seven months. (The Edge)
Vestland Bhd has secured a RM410 million contract to undertake construction works for a mixed-use development on Jalan Ampang here. (The Edge)
Citaglobal Bhd has secured an RM82.1 million subcontract to design and build a new residential college at Institut Pendidikan Guru Kampus Bahasa Melayu in Lembah Pantai here. (The Edge)
PTT Synergy Group Bhd is acquiring a 3.925-hectare parcel of freehold land in Penang for RM62.53 million in cash. (The Edge)
Newly listed GTA Holdings Bhd is expanding its aviation support business into Brunei after securing an authorised distributorship from Safran Helicopter Engines Asia. (The Edge)
YNH Property Bhd has been given until Dec 31 to fulfil outstanding conditions for its RM170 million land sale to Sunway Bhd, failing which the purchaser will have the right to terminate the deal. (The Edge)
Cuscapi Bhd’s largest shareholder Wong Thean Soon, otherwise known as TS Wong, has more than halved his stake in the company over the past two weeks, as the forced selling of his shares hits a second listed company. (The Edge)
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| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 4.056929 | 4.087356 |
| EUR | 4.720659 | 4.723124 |
| CNY | 0.606802 | 0.607109 |
| HKD | 0.517563 | 0.520940 |
| SGD | 3.201349 | 3.222362 |