Jittery mode amid concerns of ongoing foreign selling, cooling rate-cut bets, and peak results season 

Technical Pick: SUNWAY

KLCI: 1592.44 (-8.2)
DOW: 43444.99 (-305.9)
MSCI Asia: 182.22 (0.9)
FCPO (RM): 5088 (124)
BRENT (USD): 71.04 (-1.52)
USDMYR: 4.4748 (-0.011)
SGDMYR: 3.3361 (0.006)
EURMYR: 4.7263 (0.007)
AUDMYR: 2.8936 (-0.006)
GBPMYR: 5.6613 (-0.016)
US: 10-yr yield (%) 4.4394 (0.004)
BNM:10-yr yield (%) 3.869 (-0.017)

Asia/US. Taking cue from an extended consolidation in SHCOMP, Asian markets ended mixed amid increased caution over the pace of the Fed’s rate cuts following hawkish remarks from Powell on US economic strength, coupled with mixed economic readings from China (retail sales, industrial production and fixed asset investment). Sentiment remained jittery over Trump 2.0 trade policies and it’s hard-line on China with his hawkish cabinet picks. As the post-election rally lost steam, the Dow slid 305 pts to 43,445 (-544 pts WoW) as investors assessed Powell’s hawkish comments and upbeat retail sales reading. Additionally, investors weighed Trump's transition plans, including key cabinet roles with candidates set to carry out his “MAGA” policies on the border, healthcare, trade, national security and economy. Major events slated for this week are NVDA earnings results (Nov 20), building permits, housing starts and S&P Global Composite PMI.  

Malaysia. Mirroring the mixed regional markets, a weak RM (vs USD) and persistent foreign net outflows, KLCI fell 8.2 pts to 1,592.4 (-29 pts WoW), triggered by a selldown in MRDIY, MAXIS, MISC, MAXIS, TENAGA, YTL and YTLPOWR. Market breadth remained negative for the 7th straight day at 0.67 vs 0.72 previously, with 2.70bn shares traded valued at RM2.66bn (+7.2% vs avg Nov RM2.49bn). Foreign institutions were the major net sellers for the 7th straight day (-RM24m, Nov: -RM724m, YTD: +RM1.05bn) whilst local retailers (+RM3m, Nov: -RM123m, YTD: -RM4.85bn) alongside local institutions (+RM21m, Nov: +RM847m, YTD: +RM3.79bn) emerged as major net buyers. 

Outlook In wake of the of the Nov results season and continued foreign net outflows (Nov: -RM724m, Oct: -RM1.77bn), KLCI is likely to consolidate further (support: 1,566-1,577-1,589; resistance: 1,606-1,625-1,638). 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, SUNWAY’s LT uptrend remains intact barring a breakdown below RM4.32 (50D MA) and RM4.44 (30D MA) support region. Failure to defend these supports will lead to further slide towards 3.98 (38.2% FR) and RM4.11 (50% FR) levels. Conversely, a successful cross above RM4.71 (all-time high on Nov 11) may spur greater upside towards RM5.00 psychological barrier and RM5.16 (138.2% FR).   

VIRTUAL PORTFOLIO Last Friday, we had squared off our position on MRDIY (6.4% loss) after hitting the cut loss levels. 

Source: Hong Leong Investment Bank Research - 18 Nov 2024