Grossly Oversold and Building a Base Near 1,580-1,589 Amid the Peak Results Season 

Technical Pick: SIMEPROP

KLCI: 1604.04 (11.6)
DOW: 43389.6 (-55.4)
MSCI Asia: 182.18 (0)
FCPO (RM): 4890 (-9)
BRENT (USD): 73.3 (2.26)
USDMYR: 4.4792 (0.004)
SGDMYR: 3.3332 (-0.003)
EURMYR: 4.733 (0.007)
AUDMYR: 2.8934 (0)
GBPMYR: 5.6575 (-0.004)
US: 10-yr yield (%) 4.4138 (-0.026)
BNM:10-yr yield (%) 3.838 (-0.031)

Asia/US. Ahead of the hotly-anticipated NVDA results (Nov 20) and key economic indicators from China (LPR: Nov 20) and Japan (CPI: Nov 22), Asian markets ended mixed. Weighing on broader sentiment are lingering concerns about Trump’s potentially inflationary policies and its hard-line on China with his hawkish cabinet picks, compounded by Powell’s cooling rate-cuts remarks last week. Ahead to the major market-moving earnings report from NVDA, the Dow fell for the 3rd consecutive day (-56 pts to 43,389) while the Nasdaq rose (+0.6% to 18,792) as investors continued to gauge the potential impact of Trump 2.0 administration’s policies on the on the border, healthcare, trade, national security and economy, coupled with Powell’s rate-cuts caution.

Malaysia. Against the negative Wall St and regional markets, KLCI staged a long-awaited 11.6-pt technical rebound at 1,604, after ending at a 20W low of 1,592.4 (-5.5% from YTD high of 1,684.7) last Friday. Nevertheless, market breadth remained negative for the 8th straight day at 0.91, improving from 0.72 previously. Foreign institutions were the major net sellers for the 8th straight day (-RM10m, Nov: -RM734m, YTD: +RM1.05bn) alongside local retailers (-RM6m, Nov: -RM129m, YTD: -RM4.85bn) while local institutions (+RM16m, Nov: +RM863m, YTD: +RM3.81bn) emerged as the only major net buyers. 

Outlook In wake of the of the Nov results season and continued foreign net outflows (Nov: -RM734m, Oct: -RM1.77bn), KLCI is likely to consolidate further (support: 1,580-1,589; resistance: 1,630-1,636-1,648). 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. 

Technically, SIMEPROP will need a convincing breakout above the RM1.45 (downtrend line) hurdle to reinforce upside momentum towards 1.52 (upper BB) and RM1.69 (52w high) levels, while key supports are pegged at RM1.26-1.30-1.35 zones. 

Source: Hong Leong Investment Bank Research - 19 Nov 2024