Risk-off Mode as Investors Digest Nov Results Season and Persistent Foreign Net Outflows 

KLCI: 1609.26 (-12)
DOW: 44293.13 (304.1)
MSCI Asia: 187.74 (-1.8)
FCPO (RM): 5166 (-30)
BRENT (USD): 71.83 (-2.04)
USDMYR: 4.4105 (0.028)
SGDMYR: 3.3138 (-0.003)
EURMYR: 4.7113 (-0.013)
AUDMYR: 2.9037 (-0.008)
GBPMYR: 5.69 (0.01)
US: 10-yr yield (%) 4.3043 (0)
BNM:10-yr yield (%) 3.839 (-0.039)

Asia/US. Bucking Wall St’s post-election rally amid optimism surrounding Trump’s landslide victory and expectations of pro-growth and deregulatory policies, most Asian markets ended lower. The fall was mainly driven by China’s latest sluggish CPI data and unimpressive fiscal plan, especially with Trump 2.0 presidency injecting fresh uncertainty over China’s economy. The Dow extended its blistering post-election rally to a fresh record high (+304 pts to 44,293), powered by optimism around Trump 2.0 presidency and his pro-business policies. Sentiment was also lifted by expectations of another 25-bps cut on Dec 18 meeting (consensus: 65% probability). This week, all eyes shift to CPI, PPI, retail sales, and speeches by Fed officials to seek clues on the Fed’s policy direction following Trump’s return to the White House.

Malaysia. Tracking lower regional markets and continued foreign net selling for the 3rd straight session, KLCI slid 12 pts to 1,609.3, led by selldown on MAYBANK, TENAGA, PBBANK, PCHEM, CIMB and HLBANK. Market breadth was sluggish at 0.52 with 2.68bn (-5% vs Nov avg 2.82bn) shares traded valued at RM2.03bn (-18% vs avg Nov RM2.47bn). Foreign institutions were the major net sellers (-RM104m, Nov: -RM567m, YTD: +RM1.21bn) while local institutions (+RM65m, Nov: +RM704m, YTD: +RM3.65bn) alongside local retailers (+RM39m, Nov: -RM137m, YTD: -RM4.86bn) 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: -RM567m, Oct: -RM1.77bn). Additionally, lingering Middle East turmoil, 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 - 12 Nov 2024