Time For Some Profit Taking

The FBMKLCI closed higher for the fifth session as buying interest were strong
within the selected Utilities, Telco and Banking heavyweights with foreign funds
inflow stood at over the past 5 sessions. However, the US stock markets traded
mixed where the Dow and S&P500 dipped but Nasdaq managed to eke out small
gains ahead of the CPI and PPI data that will be released later this week. Also, with
the US Treasury yield continues to hover above the 4% mark and expectations of the
Fed to begin rates cuts as soon as March has been slowly declining. On the
commodity market, Brent oil price fluctuated around the USD76-78 zone as concerns
over the Middle East and the Red Sea have contributed to the support of the
commodity prices.

Sectors focus: Given the profit taking activities have emerged yesterday, we expect
further consolidation to be seen within the Construction, Properties and Building
Material segments after a strong rally over the past 5 sessions. Meanwhile, the
laggards that buying interest may pick up could be the Plantation, Transportation
and Logistics, as well as Telecommunications. Nevertheless, we still expect the
Johor-theme and the potential revival of KL-SG HSR catalysts to provide overall
buying support in the stock markets going forward.

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