MARKET REVIEW

Asia/US. Most Asian markets ended higher, taking cue from a less aggressive Fed as many officials suggested a “slowing in the pace of increases would soon be appropriate in the wake of slowing US economy. Sentiment was also boosted by rising monetary stimulus in China to support an ailing economy amid surging Covid cases and property crisis. Ahead of the Thanksgiving holiday-shortened week, the Dow was closed overnight. On Wednesday, the Dow ended +96 pts at 34,194 while the US 10Y Treasury yield slipped 6bsp to 3.69% after Nov FOMC minutes showed officials see the case for a slower pace of interest rate rises.

Malaysia. KLCI rallied 58.4 pts or 4% to a 3M high at 1,501.9 following the end of political impasse post GE15 after Anwar was sworn as Malaysia’s 10th PM. Meanwhile, the ringgit (vs USD) strengthened 1.74% to RM4.4496 whilst the 10Y MGS tumbled 25 bps to 4.13%. After net selling RM709m in the last six consecutive day, foreign investors were the major net buyers (+RM341m, Nov: -RM155m) whilst local institutions (-RM159m, Nov: +RM42m) and retailers (-RM182m, Nov: +RM113m) were the major net sellers.

TECHNICAL OUTLOOK: KLCI

Following the announcement of Anwar as the 10th PM, KLCI staged a massive rally to break our envisaged 1,468-1,482-1,500 barriers at 1,501.9 yesterday. In the wake of bullish technical, KLCI is poised to break the next hurdle of 1,506 (200D MA) before revisiting stiffer resistance at 1,528 (17 Aug high) and 1,555 (200W MA) zones. Conversely, pullback supports are pegged at 1,468-1,482 levels.

MARKET OUTLOOK

Despite potential pullback due to the recent 9.3% relief rally from 1,373 (2Y low on 13 Oct), KLCI may advance further towards 1,528 (17 Aug high) and 1,555 (200W MA) zones after Anwar was sworn as Malaysia’s 10th PM, with key supports now revised to 1,468-1,482 territory. We like YTLPOWR (RM0.68, HLIB BUY-TP RM1.08) amid undemanding valuation (10x P/E FY23E) given the strong earnings recovery of Singapore Seraya while dividends may surprise on the upside (FY23E DY: 6.6%). The stock should gain further traction towards RM0.70-0.73-0.76 following a downtrend line breakout and bottoming up indicators whilst supports are situated near RM0.64-0.66.

Source: Hong Leong Investment Bank Research - 29 Nov 2022