Risk-off Mode Amid Trump 2.0, China Growth, Earnings Season, and Continued Foreign Outflows 

KLCI: 1608.43 (-0.8)
DOW: 43910.98 (-382.1)
MSCI Asia: 184.99 (-2.8)
FCPO (RM): 5036 (10)
BRENT (USD): 71.89 (0.06)
USDMYR: 4.4383 (0.028)
SGDMYR: 3.3162 (0.002)
EURMYR: 4.7161 (0.005)
AUDMYR: 2.9038 (0)
GBPMYR: 5.6916 (0.002)
US: 10-yr yield (%) 4.4275 (0.123)
BNM:10-yr yield (%) 3.85 (0.011)

Asia/US. Asian markets slipped as investors digested the potential impact of Trump 2.0 policies and the upcoming Fed’s rate-cuts. Sentiment was further weakened by China’s weak October PPI (lowest in 11M) and disappointing new CNY loans of 500bn (vs. 700bn consensus), along with last week’s disappointing fiscal package. Following a blistering 5-day post-election rally of 2,499 pts, the Dow tumbled 382 pts at 43,911 on profit taking. Sentiment was cautious with the US10Y yields surging (+12 bps to 4.43%) and the DXY hitting a 2Y high (+0.5% to 106), ahead of key CPI, PPI and retail sales prints, as well as and speeches by Fed officials. Investors are closely watching the Fed's policy direction, as the anticipated Trump 2.0 presidency could spur growth through inflationary measures like tax cuts, deregulation, and extended fiscal stimulus.

Malaysia. Tracking lower regional markets and continued foreign net selling for the 4th consecutive day, KLCI eased 0.9-pt to 1,608.4 in a listless trade after fluctuated within +6.7 pts and –3.8 pts. Market breadth remained negative at 0.69 vs 0.52 previously, with 2.99bn (+5.2% vs Nov avg 2.84bn) shares traded valued at RM2.54bn (+2.5% vs avg Nov RM2.48bn). Foreign institutions were the major net sellers (-RM17m, Nov: -RM585m, YTD: +RM1.19bn) alongside local institutions (-RM2m, Nov: +RM703m, YTD: +RM3.65bn) while local retailers (+RM19m, Nov: -RM118m, YTD: -RM4.84bn) emerged as major net buyers. 

Outlook In wake of the of the Nov results season, KLCI is likely to consolidate further (support: 1,586-1,595-1,600; resistance: 1,625-1,643-1,655) due to a lack of domestic catalysts and continued foreign net outflows (Nov: -RM585m, Oct: -RM1.77bn). Additionally, lingering Middle East turmoil and China’s sluggish growth, as well as expectations of more confrontational and protectionist policies under Trump 2.0 could trigger more economic fluidity and market volatility. 

Source: Hong Leong Investment Bank Research - 13 Nov 2024