The FBM KLCI has moved out of the consolidation phase with strong buying interest
within banking sector after the Chinese New Year break. However, Wall Street
tumbled after the release of the US CPI data which was above consensus’
expectations. This has pushed back the market expectation of the interest rate cuts,
translating to higher US Treasury yields and stronger Dollar. Next to watch out will
be the upcoming (i) retail sales and (ii) US PPI data. Nevertheless, we expect the
buying support may extend on the local front supported by several domestic
catalysts at least for the near term. Meanwhile, the Brent oil price continues to trade
above USD82/bbl with ongoing tension in the Middle East.

Sectors focus: Local trading sentiment should stay positive with the trading
catalysts revolving around the data centre theme as well as mega infrastructure
projects and the soon-open-for-bidding LSS5. Key sectors to focus will be (i)
Construction, (ii) Property, Utilities and Renewable Energy. Meanwhile, we think there
might be a spike in shipping rates with the ongoing tension in the Red Sea region,
hence benefiting Transportation & Logistics companies. In the upcoming earnings
season, we like the Consumer and Energy sectors.