The FBMKLCI had a great start for 2024 and managed to surpass the stiff resistance
earlier on at 1,465 as buying interest emerged on the Utilities heavyweights and 70%
of the index members closed higher. Meanwhile, the US stock markets ended lower
for another session as the 10-year US Treasury yield rose inched up towards 4% and
traders avoided the growth stocks, specifically the Technology sector. On the
economic data, the ADP non-farm report showed an increase in job activity, while
unemployment claims were less-than-expected, suggesting persistent labour
market strength. Closer to home, we expect the buying momentum to sustain on the
local front after the breakout recently on the FBM KLCI. On the commodity market,
Brent oil price notched lower after a big jump in US refined product inventories.

Sector focus: The Technology sector may extend its weakness following the profit
taking in the US. Meanwhile, the removal of 2sen/kWh in electricity rebate for
household users consuming 600-1500 kwh/month may provide upside towards
Tenaga and could boost solar panels demand going forward; we favour the Utilities
and Renewable Energy segments. Meanwhile, the (i) Johor-theme, (ii) ongoing and
potential new mega infra projects and (iii) easing of MM2H policies could boost
trading in the Construction, Building Material, and Property sectors.