Sideways Ahead of the Upcoming CNY Holidays 

KLCI: 1516.58 (3.6)
DOW: 38654.42 (134.6)
MSCI Asia: 166.46 (0.3)
FCPO (RM): 3764 (-34)
BRENT (USD): 77.33 (-1.37)
USDMYR: 4.717 (-0.013)
SGDMYR: 3.5322 (0.001)
EURMYR: 5.1371 (0.022)
AUDMYR: 3.1144 (0.028)
GBPMYR: 6.0178 (0.015)
US: 10-yr yield (%) 4.0199 (0.14)
BNM:10-yr yield (%) 3.76 (-0.03)

Asia/US. Tracking the fresh record close on Dow, Asian markets started higher, fuelled by bargain-buying from the previous day’s sell-off amid strong earnings from US tech titans, soothing worries about reduced expectations for a Fed rate cut in March. However, early gains were tempered ahead of the major US jobs data and continued rout in China markets (despite a series of stimulus measures from Beijing) amid and fears of a wider US ban on Chinese entities and the fallout from Evergrande’s liquidation. The Dow rallied as much as 264 pts in early trades, as robust META results sparked a rally in mega tech companies. Nevertheless, the gains were cut to 135 pts at 38,654 (+545 pts WoW), as the blowout jobs report dashed hopes of a March rate cut. This week, investors will closely monitor corporate earnings from MCD, CAT, AMGN, DIS, UBER, PM, and COP. Also, attention will be on key economic data including Fed official speeches, and the release of S&P Manufacturing and ISM Services PMI prints.

Malaysia. Tracking the record close on Dow, KLCI inched up 3.6 pts to 1,516.6 (+10.3 pts WoW), spurred by buying interests on MAYBANK, TENAGA, GENTING, GENM and SIMEPLT. Despite the headline gain, market breadth was negative for a 4th session at 0.45 vs 0.63 a day ago. Foreign investors (+RM87m, YTD: +RM766m) emerged as major net buyers followed by local retailers (+RM30m, YTD: -RM637m), while local institutions (-RM117m, YTD: -RM129m) were the main net sellers. 

Outlook The local market should stay sideways (resistance: 1,528-1,548; support: 1,483-1,500) with more subdued trading activities ahead of the CNY celebrations (Bursa holiday: 12 Feb), as investors weigh the US Fed’s monetary policy stance and upcoming speeches, coupled with awaiting further domestic market leads. 

VIRTUAL PORTFOLIO We took profit on ARMADA (11.1% return) and WASCO (6.1% return) on 2 Feb.

Source: Hong Leong Investment Bank Research - 5 Feb 2024