The FBM KLCI continued to trade in a sideways manner for the past 4 trading days
as profit taking activities kicked in within the Utilities heavyweights ahead of the
Chinese New Year long weekend break. Meanwhile, the US stock markets ended on
a negative tone with the market pricing in further timeline on the US interest rate cuts
after Jerome Powell’s speech offsetting the higher-than-expected US ISM Services
PMI data. Meanwhile, the sluggish sentiment in China could further drag the
situation on the local front and we believe the profit taking activities could persist
over the near term. On the commodity markets, Brent oil climbed after a 4-day drop
on the back of rising geopolitical tensions following the US air strikes.
Sectors focus: Although most of the sector indices are turning weak at this juncture
on the back of the profit taking activities, we expect the bargain hunting activities
will take place within the Construction, Property and Building Material segments on
the back of the following trading catalysts, namely (i) the potential revival of KL-SG
HSR and (ii) ongoing Johor-region developments. Meanwhile, we like Consumer and
Telco for their defensive characteristics.
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