Range bound in April after falling 1% in March 

KLCI: 1536.1 (5.5)
DOW: 39807 (0.0)
FCPO (RM): 4266 (58)
BRENT (USD): 86.88 (-0.1)
USDMYR: 4.725 (-0.01)
SGDMYR: 3.501 (0.00)
EURMYR: 5.093 (-0.01)
AUDMYR: 3.0779 (0.01)
GBPMYR: 5.959 (0.00)
US: 10-yr yield (%) 4.20 (0.0)
BNM:10-yr yield (%) 3.85 (0.0)

Asia/US. Most Asian markets ended the last trading day of 1Q with modest gains while several markets, including Australia, Hong Kong and Singapore, were closed for Good Friday holiday. Sentiment was edgy as investors braced for the key PCE price data and Powell’s speech for fresh clues about its policy outlook. Investors also assessed Japan’s forex chief’s stern remark of possible government intervention amid an unusual slump in yen and vows to act if needed. Ahead of the Good Friday holiday, Dow rose 47 pts to 39,807 (Mar: +2.1%, 1Q: 5.6%) on 28 Mar, as investors awaited the release of the Mar core PCE index (matched expectations at 2.8% YoY) and Powell's speech (reiterated that the Fed is in no hurry to cut rates). Major economic data flows under scrutiny this week for insights into the central banks’ policies are: (i) US (jobs stats, Manufacturing and Services PMIs, factory orders etc), (ii) China (Manufacturing & services PMIs), (iii) BOJ Tankan index. 

Malaysia. Tracking higher regional markets and 1Q24 window dressing, KLCI gained 5.5 pts to 1,536.1 (Mar: -1%, 1Q: 5.6%). Market breadth recovered to 1.1 vs 0.65 previously. Foreign investors resumed their net selling for a 3rd consecutive session (-RM106m, Mar: -RM2.87bn, YTD: -RM875m), while retail investors extended their net outflows for a 16th straight day (-RM80m, Mar: -RM292m, YTD: -RM1.31bn). Meanwhile, local institutions (+RM186m, Mar: +RM3.16bn, YTD: +RM2.18bn) emerged as the major net buyers for a 3rd day. 

Outlook KLCI slid 1% in Mar, halting its 5M winning streak. Technically, barring a decisive fall below 1,500-1,518-1,528 support levels, the odds would still favour the bulls to resume its ascent in Apr (resistance: 1,554-1,573-1,600), reflected by KLCI’s historical average gains of 0.6% and 1.5% over the past 10 and 20 years, respectively. The local market may witness further technical rebound after China released the upbeat March manufacturing (at 12M high to 50.8) and services (at 9M high to 53) PMIs yesterday. However, upside may be capped as investors brace for a data-packed week from the US, China and Japan, as well as lingering concern over persistent foreign net selling (5th consecutive weekly outflows). 

VIRTUAL PORTFOLIO  On 29 Mar, we squared off our position on HEIM (2% gain), DIALOG (8.5% gain) and TOMEI (7% gain).
 

Source: Hong Leong Investment Bank Research - 1 Apr 2024