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Local
Budget cheer keeps KLCI afloat
Mon, 12-Oct-2026 07:36 am
by Research Team • Apex Research

Malaysian Market Review. The FBM KLCI rebounded 7.44 points, or 0.46%, to 1,608.45 on Friday, from Thursday’s close of 1,601.01. Market breadth was positive with gainers leading losers, 627 vs 450. Budget 2027 was announced last Friday with numerous policy measures including but not limited to: minimum wage increases (+17.6% to RM2,000) and an increase in STR allocation to RM16bn from RM15bn. In general, Budget 2027 was interpreted as supportive for economic growth which helped buoy market conditions, counteracting recent foreign selling pressure. Construction (+2.30%), Transportation & Logistics (+1.19%), and Property (+1.18%) led gainers while Healthcare (-0.75%) and Energy (-0.09%) were the laggards.

 

Global Markets. Wall Street ended higher on Friday, with the Dow rising 423.31 points, or 0.83%, to 51,654.95, while the S&P 500 gained 0.59% to 7,811.51 and the Nasdaq advanced 0.64% to 27,366.17, as investors looked ahead to key inflation data this week. European markets also rebounded, with the STOXX Europe 600 gaining 0.97% as easing oil prices and bond yields provided some relief from recent inflation and monetary-tightening concerns. Asian markets were mostly firmer on Friday, with Hong Kong's Hang Seng rising 1.79% and China's Shanghai Composite edging 0.05% higher, while Japan's Nikkei 225 slipped 0.02%; South Korean markets were closed for a public holiday. Over the weekend, geopolitical risks intensified after a Houthi attack on Riyadh's international airport left at least 12 people dead and more than 300 wounded, prompting renewed warnings against travel through Saudi airports and weighing on Gulf equities. US Treasury markets are closed on Monday for Columbus Day, although US equity markets remain open.

 

Market Outlook. We expect the FBM KLCI to trade with a slight positive bias in the near term, supported by improving domestic sentiment following Budget 2027 and positive cues from Wall Street. Friday’s stronger market breadth also suggests buying interest has broadened beyond a handful of index heavyweights, which could support further selective upside. Nevertheless, gains may be capped by persistent foreign selling and geopolitical tensions in the Middle East, particularly if they trigger another rise in crude oil prices or global bond yields. Overall, we expect the KLCI to remain supported above recent lows, with trading likely to stay selective as investors balance domestic policy catalysts against external macro and geopolitical risks.

 

Sector focus. Consumer stocks may attract buying interest from higher cash aid, tax cuts and one-off payments. Banks could benefit mildly from loan growth, supported by RM57bn in guarantee schemes and an additional RM5bn BNM SME facility. Property developers may gain from stamp-duty relief for first homes priced up to RM750k.

 

Technical Commentary: The FBM KLCI had a pause in its losing streak, bouncing 7.44 points or 0.46% to close at 1,608.45, trading just above the psychological 1,600 level, which is now the key support. The index remains well below all key moving averages, showing that the market remains weak. The growing gap between the current price and these averages also suggests that there is still no clear sign of where the market may find support. The index remains vulnerable to further downside, with 1,600 as the key near-term support. A decisive break below this level could open the way towards 1,580, while any rebound is likely to face selling pressure. The outlook would improve only if the index reclaims the 1,625–1,650 range; until then, the bias remains bearish.

 

Company News

Genting Bhd plans to raise RM1.25 billion through a renounceable rights issue to repay maturing debt and fund working capital. (The Edge)

 

IOI Properties Group Bhd chief executive officer Datuk Lee Yeow Seng said the group is in talks for a secondary listing on the Singapore Exchange (SGX). (The Edge)

 

PMB Technology Bhd, a 58.78%-owned subsidiary of Press Metal Aluminium Holdings Bhd, plans to invest RM650 million to build a silicon-aluminium alloy plant in the Samalaju Industrial Park in Sarawak as the group seeks to diversify away from a struggling silicon metal business. (The Edge)

 

Unisem (M) Bhd and its subsidiary plan to invest RM396 million to expand its semiconductor manufacturing plant in Gopeng, Perak, as the group seeks to capture growing demand for advanced chip packaging used in artificial intelligence (AI) and data centres. (The Edge)

 

EP Manufacturing Bhd is partnering Beijing-listed Hebei Shichang Auto Parts Co Ltd to invest RM100 million in a new fuel tank manufacturing facility in Selangor to supply Proton Holdings Bhd. (The Edge)

 

Astral Asia Bhd is exploring the sale of 2,433 acres of land at the Kuantan Hi-Tech Park in Pahang to HNG Capital Sdn Bhd for RM233.57 million. (The Edge)

 

Brothers Datuk Seri Nazir Hussin Akhtar Hussin and Datuk Wira Mubarak Hussain Akhtar Husin have voluntarily gone on garden leave from their executive roles at Avangaad Bhd amid an investigation into their personal business interests. (The Edge)

 

Hektar Real Estate Investment Trust has terminated its proposed RM26 million acquisition of a 90% stake in Terramark Sdn Bhd, citing the sellers’ failure to fulfil several key conditions precedent. (The Edge)

 

Ahmad Zaki Resources Bhd has reached an amicable settlement with AmBank (M) Bhd and AmBank Islamic Bhd, which had filed civil suits against the group and its subsidiary over a combined RM69.3 million in outstanding payments owed by the unit. (The Edge)

Sentiment: Positive
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