KLCI: 1642.77 (-5.9)
DOW: 40834.97 (-61.6)
MSCI Asia: 185.07 (1.3)
FCPO (RM): 3733 (18)
BRENT (USD): 77.2 (-0.46)
USDMYR: 4.3815 (-0.001)
SGDMYR: 3.3493 (0.005)
EURMYR: 4.8527 (0.016)
AUDMYR: 2.9486 (0.018)
GBPMYR: 5.698 (0.016)
US: 10-yr yield (%) 3.8067 (-0.064)
BNM:10-yr yield (%) 3.759 (0.001)
Asia/US. Mirroring Dow’s rally, most Asian markets ended cautiously higher as investors weighed (i) the PBOC’s decision in keeping its LPR (despite recent weak economic data), (ii) a stronger yen potentially leading to another round of unwinding Yen carry trades, (iii) upcoming economic data (e.g. Japan’s inflation data, US manufacturing and services PMIs) and (iv) upcoming FOMC minutes and Fed official speeches. After surging 1,539 pts over five consecutive days, the Dow eased 61 pts to 40,835 as investors parse on upcoming US PMIs, Powell’s Jackson Hole speech and July FOMC minutes for further economic and policy insights. Meanwhile, Brent oil lost 0.46% to USD77.2 amid hopes of a cease-fire in Gaza and rising concerns about the global demand outlook.
Malaysia. KLCI lost 5.9 pts to 1,642.8 after rallying 58.3 pts over the previous five straight session. Market breadth was negative at 0.42 vs 1.11 previously while daily volume rose 7.7% to 4.2bn shares valued at RM4.55bn (+5.8%). Foreign institutions were notable net buyers for six days in a row (+RM266m, Aug: +RM486m, Aug: +RM977m). In contrast, local institutions (-RM210m, Aug: +RM84m, YTD: +RM3.55bn) and local retailers (-RM56m, Aug: -RM570m, YTD: -RM4.53bn) emerged as net sellers.
Outlook Given the encouraging economic and earnings outlook, a sustained RM appreciation and increased risk appetite by foreigners, KLCI’s current rebound still has legs to revisit 1,664-1,680-1,700 levels. However, after rallying 188 pts/12.9% YTD, the index may experience some volatility as earnings season reaches its peak (support: 1,613-1,625-1,638).
Technically, MNHLDG may find some support near RM0.87-0.90 after retreating from its all-time high of RM1.12 (12 Aug). A successful crossover above RM0.96-0.99 hurdles could propel share prices higher towards RM1.05-1.12 range.
Source: Hong Leong Investment Bank Research - 21 Aug 2024