Malaysian Market Review. The FBM KLCI rose 10.15 points, or 0.59%, to 1,618.01 on Monday, from Friday’s close of 1608.45. Market breadth was positive with losers leading gainers, 778 vs 344. Following Budget 2027 enthusiasm, markets have cooled somewhat although the Budget should continue to support fundamentals and market sentiment. Having said that, elevated bond yields and geopolitical risks continue to limit the upside. Sector-wise, Finance (+0.92%) and Transportation & Logistics (+0.49%) led gainers while Healthcare (-2.40%), Consumer (-2.04%) and Utilities (-1.18%) were the main laggards.
Global Markets. Wall Street ended mixed on Monday, with the Dow rising 0.38%, to 51,850.55, while the S&P 500 slipped 0.06% to 7,807.24 and the Nasdaq declined 0.44% to 27,245.90, as a renewed rise in crude oil prices and weakness in semiconductor stocks offset gains in selected defensive and energy names. Sentiment was also weighed by comments from Cleveland Fed President Beth Hammack, who argued that monetary policy should move relatively quickly towards a more restrictive stance, lifting market-implied odds of an October rate hike to around 22% from 17.7% on Friday. European markets performed better, with the STOXX Europe 600 rising 0.65% to 635.65, supported by a 1.5% gain in banking stocks despite crude oil remaining near two-week highs following renewed attacks on Saudi Arabia. Asian markets were mixed, with South Korea’s KOSPI falling around 3.6% as technology shares came under pressure, while Hong Kong’s Hang Seng edged 0.25% higher and the Shanghai Composite fell around 0.43%; Japanese markets were closed for the Sports Day holiday. Brent crude climbed back above US$106/bbl as the Saudi attacks revived concerns over Middle Eastern supply disruptions.
Market Outlook. We expect the FBM KLCI to trade cautiously with a slight positive bias, as continued optimism surrounding Budget 2027 and strength in selected index heavyweights provide support against a more challenging external backdrop. However, Monday’s sharply negative market breadth despite the higher benchmark suggests underlying risk appetite remains weak and that the post-Budget rally is becoming increasingly selective. Elevated crude oil prices, rising global bond yields and renewed Middle East tensions should continue to cap valuations, particularly as expectations for further US monetary tightening remain in play. Budget 2027 should nevertheless provide a degree of domestic earnings visibility, particularly for sectors exposed to household spending and government development expenditure.
Sector focus. Consumer stocks may continue to 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 extended the pause in its downtrend by rising 9.56 points to close at 1,618.01, trading just above the psychological 1,600 level, which is now the key support. Though it extended its pause, the index remains 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
AirAsia Group Bhd co-founder Tan Sri Tony Fernandes met with officials from Malaysia's Finance Ministry two weeks ago to discuss potential government support for Southeast Asia's largest low-cost airline, Reuters reported, citing sources. (The Edge)
IJM Corporation Bhd has secured a RM1.23 billion contract from AT&S Austria Technologie & Systemtechnik (Malaysia) Sdn Bhd to construct semiconductor manufacturing facilities at the Kulim Hi-Tech Park in Kedah. (The Edge)
Zetrix AI Bhd’s managing director Wong Thean Soon, better known as TS Wong, has continued to sell down his shareholding, further reducing his stake in the company. (The Edge)
IOI Properties Group Bhd is eyeing a 50% stake in One Raffles Place, an integrated commercial development in Singapore’s central business district. (The Edge)
MN Holdings Bhd has secured a RM293.88 million contract to build two high-voltage power facilities for a data centre development in the central region of Peninsular Malaysia. (The Edge)
Swift Energy Technology Bhd said it has secured a contract to engineer and supply a 11kV substation for a gas compression plant in Johor, marking its first engineering, procurement, construction, and commissioning (EPCC) project. (The Edge)
Kinergy Advancement Bhd has secured a RM47.5 million subcontract from Gamuda Bhd's unit for electrical works at a hyperscale data centre in Bandar Spring Hill, Port Dickson. (The Edge)
iCents Group Holdings Bhd said it has secured a contract worth RM36.15 million to undertake engineering, procurement, construction and commissioning (EPCC) works for the turnkey development of a semiconductor wafer processing facility in Selangor. (The Edge)
Infomina Bhd's wholly-owned subsidiary, Infomina Jalan KK, has renewed its five-year software subscription and maintenance contract worth ¥855 million (about RM22.1 million) with Panasonic Digital Co Ltd. (The Edge)
LAC Med Bhd has secured a seven-year contract worth up to RM20 million to supply medical imaging equipment and related services to an upcoming specialist healthcare centre in Petaling Jaya, Selangor. (The Edge)
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| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 4.067843 | 4.098409 |
| EUR | 4.563934 | 4.566371 |
| CNY | 0.609759 | 0.610082 |
| HKD | 0.518586 | 0.521970 |
| SGD | 3.177758 | 3.198571 |