Back in Consolidation Mode Ahead of the Incoming Nov Results Season and Strong Foreign Net Outflow 

KLCI: 1623.28 (-10.9)
DOW: 43729.34 (-0.6)
MSCI Asia: 189.57 (2.3)
FCPO (RM): 4998 (46)
BRENT (USD): 75.63 (0.71)
USDMYR: 4.4043 (0.001)
SGDMYR: 3.3191 (0.009)
EURMYR: 4.7331 (-0.003)
AUDMYR: 2.9198 (0.02)
GBPMYR: 5.6848 (0.003)
US: 10-yr yield (%) 4.3257 (-0.106)
BNM:10-yr yield (%) 3.92 (0.027)

Asia/US. Mirroring a remarkable record closing from Dow and a rally in SHCOMP, Asian markets ended mostly higher. Sentiment stayed positive as investors weighed the potential implications of Trump 2.0 presidency, upcoming FOMC meeting verdict, alongside with China’s upbeat trade surplus data and hopes for more stimulus outweighed concerns about potential tariffs threatened by Trump. The Dow ended flat while the US 10Y bond yield slid (-11 bps to 4.33%) and the Nasdaq rallied 1.5% as the post-election rally continued and the Fed delivered a widely expected rate cut (-25 bps to 4.75%). The outlook for further rate cuts has cooled somewhat, with consensus now expecting just two cuts (Dec 24 & Jan 25 meetings) amid concerns about the inflationary impact of the Trump 2.0 presidency policies.

Malaysia. Bucking Wall St and higher regional markets, KLCI slipped 10.9 pts at 1,623.3 on profit taking after soaring 32.3 pts in the last four sessions. Market breadth deteriorated to 0.7 from 2.41 previously, with 3.78bn shares traded valued at RM3.42bn. Foreign institutions were the major net sellers (-RM368m, Nov: -RM365m, YTD: +RM1.42bn) while local institutions (+RM365m, Nov: +RM577m, YTD: +RM3.52bn) alongside local retailers (+RM3m, Nov: -RM223m, YTD: -RM4.95bn) emerged as major net buyers. 

Outlook Ahead of the Nov results season, the KLCI is likely to consolidate further (support: 1,589-1,600-1,607; resistance: 1,648-1,657) due to a lack of domestic rerating catalysts and continued foreign net outflows (Nov: -RM354m, Oct MTD: -RM1.77bn). Moreover, the outlook may be tempered by external risks, including lingering Middle East turmoil, as well as bracing for more economic fluidity and market volatility under Trump 2.0 presidency given his rather confrontational “shoot from the hip” style. 

Source: Hong Leong Investment Bank Research - 8 Nov 2024