The FBM KLCI snapped a 5-day retracement and rebounded on the back of the
window dressing activities towards year end. Meanwhile, Wall Street trended higher
overnight with the expectation of a more dovish stance from the Fed and potentially
cutting the interest rate in 2024. Do note that the Fed’s interest rate hiking process
had tame the inflationary pressure without igniting the recession is likely to push the
markets higher in the near term. The dollar continues to fall, while the US 10-year
bond yield declines further. We believe the positive sentiment on Wall Street could
spillover towards stocks on the local front, pushing the FBM KLCI higher. On the
commodity markets, Brent oil prices inched lower below the USD80/bbl mark as oil
inventories rose this week by 1.84m barrels.

Sector focus: With the ongoing window dressing activities, we believe buying
interest could emerge further within the index heavyweights at least for the rest of
the week. Meanwhile, we believe the Johor-theme, easing requirements of MM2H
programme, coupled with the potential revival of KL-SG HSR would bode well for the
Construction, Property, Building Material as well as the Utilities sectors. Also, we
believe the Consumer sector may gain more attention next year with the focus on
subsidy rationalisation programmes next year.