MARKET REVIEW Asia/US. Ahead of the widely-focused US 3Q22 GDP announcement, MSCI All Countries Asia Pacific Index rose 0.47% at 137.91, as investors assessed the expectations of a Fed pivot during the Dec meeting in the wake of recent US weak economic data, more lockdowns in China in a bid to arrest widening outbreaks and a tepid 9M industrial profits in China. The Dow rallied 549 pts in early trades, boosted by an upbeat 3Q22 GDP but profit taking capped gains to +194 pts at 32,033 as investors weighed a slew of corporate earnings from McDonald’s, Boeing, Honeywell, Caterpillar, META and Ford. After the bell, Apple’s earnings beat estimates while Intel and Amazon results were below expectations.

Malaysia. KLCI eased 0.9-pt at 1,454.1 after hovering in tight range from 1,452.3-1,459.9. Market breadth remained positive as (G/L) ratio improved to 1.55 from 1.47 a day ago, supported by daily volume of 2.53bn shares valued at RM1.87bn. Foreigners logged in a 4th

straight net buying session (+RM125m, Oct: -RM619m, Sep:-RM1.63bn) whilst local retail (- RM26m, Oct:-RM159m, Sep: +RM452m) and institution (-RM99m, Oct: +RM778m, Sep: +RM1.17bn) investors remained as net sellers.

TECHNICAL OUTLOOK: KLCI

We expect KLCI to trade in a range bound mode in the short term. The index may encounter some resistance near 1,468 (downtrend line) following recent relief rally from 1,373 (2Y low). Only a successful breakout could spur the benchmark higher to revisit more formidable barriers at 1,482-1,500-1,514 territory. On the contrary, any healthy pullback is likely to be well-supported near 1,400-1,424-1,436 levels.

MARKET OUTLOOK

We expect KLCI to trade in a range bound mode ahead of the FOMC (2 Nov) and BNM (3 Nov) meetings after recent relief rebound from 1,373 (2Y low). Profit taking may cap gains near 1,468 and 1,480 levels whilst 1,500-1,518 territory will act as more formidable hurdles (support: 1,400-1,424-1,436). With capital preservation as the key, we continue to advocate investors to seek refuge in banks, telcos, utilities, consumer, healthcare, and construction sectors, in anticipation that the new government post GE15 will continue to be highly supportive of domestic consumption.

Source: Hong Leong Investment Bank Research - 28 Oct 2022