Wild swings ahead amid foreign investors’ exodus and Fed’s rate-cut jitters 

Technical Pick: WCT 

KLCI: 1597.49 (-6.8)
DOW: 44722.06 (-138.3)
MSCI Asia: 183.13 (-0.3)
FCPO (RM): 4903 (18)
BRENT (USD): 73.28 (0.45)
USDMYR: 4.4465 (0.003)
SGDMYR: 3.3066 (-0.002)
EURMYR: 4.6832 (0.011)
AUDMYR: 2.8881 (0.005)
GBPMYR: 5.6237 (0.023)
US: 10-yr yield (%) 4.2634 (0)
BNM:10-yr yield (%) 3.783 (-0.015)

Asia/US. Ahead of the key Tokyo’s inflation data today, Asian markets ended mixed, weighed down by lingering concerns over Trump’s "tariff tantrums" and his selection of China hawks for key cabinet positions, reigniting US-China trade war fears. Sentiment was also dampened by Fed’s rate-cut dilemma after a stubbornly strong US PCE index. Wall St was closed due to Thanksgiving holiday. On Nov 27, the index fell 138 pts to 44,722 after rallying 1,191 pts in five straight session as investors assessed higher core PCE YoY, declining weekly jobless claims and a strong 3Q24 GDP growth at 2.8%, which highlighted both economic resilience and the bumpy progress of disinflation towards the 2% target.

Malaysia. In wake of continued foreign capital flights and a mixed results season, KLCI lost 6.8 pts to 1,597 to end its 5-day winning streak, led by declines in CIMB, PBBANK, HLBANK, TM, SDG and MAYBANK. Foreign institutions intensified the net outflows for the 7th consecutive day (-RM718m, Nov: -RM2.55bn, YTD: -RM776m) while local institutions (+RM675m, Nov: +RM2.82bn, YTD: +RM5.76n) and local retailers (+RM43m, Nov: -RM264m, YTD: -RM4.99bn) emerged as major net buyers. 

Outlook Given the mixed Nov results season and persistent exodus by foreign investors (Nov: -RM2.55bn, Oct: -RM1.77bn), KLCI is likely to extend its consolidation. Additionally, geopolitical tensions, Fed’s rate-cuts uncertainty, China’s weak growth, and Trump 2.0’s MAGA policy, may escalate market volatility and cap any rebound near 1,615-1,625 -1,648 (support: 1,580-1,588) levels. 

Technically, WCT (BUY, TP: RM1.44) may extend its sideways consolidation near RM0.74 and RM0.80 (200D MA) and in the near term after violating multiple MAs and FRs supports. Only a successful breakout above key barrier at RM0.86 (lower BB) could spur more meaningful rebound towards RM0.915 (mid BB) and RM0.965 (upper BB) targets. 

Source: Hong Leong Investment Bank Research - 29 Nov 2024