Overall, the FBM KLCI traded flat as investors were assessing the midterm review of the 12th Malaysia Plan. Meanwhile, Wall Street gained momentum despite heading into several key economic data such as CPI, PPI and retail sales. However, do note that the FOMC meeting will be held next week and traders may stay cautious ahead of the event. Closer to home, we think the local bourse may perform on a positive note after Rafizi Ramli elaborated further on the 12th Malaysia Plan on national TV station, reiterating that the government will be focussing on 5 high-growth high value sectors (HGHV), while the buying interest may spillover from Wall Street as well.

The FBM KLCI ended lower last week prior to the by-election over the weekend, coupled with weaker regional stock markets performance. Since both the Johor by-elections have concluded, we expect the market to perform better in the near term. Also, we expect the positive rebound on Wall Street may spillover to stocks on the local front. However, given the fluid developments in the political scene, it may limit the upside potential of the stock markets and we believe traders may turn their attention to value stocks during uncertainty periods.

Overall sentiment on the Bursa exchange was slightly weaker and the FBM KLCI ended flat for the session as profit taking activities emerged, in line with the regional benchmark. Meanwhile, we expect the negative performance from Wall Street may spillover to stocks on the local front. Given the 2 Johor by-election will be held this weekend, traders may take a cautious stance and continue with the profit taking activities within the construction sector at least for the near term, while shifting their focus on stocks within the defensive or value stocks.

After a sharp sell down, buying support re-emerged and we noticed the FBM KLCI rebounded, thanks to the banking and energy index members. Also, we believe the surge in the oil price has lifted the sentiment in Malaysia. However, with the negative tone on Wall Street following the concerns over a potential hike this year, coupled with the slowdown in manufacturing activities in Germany, profit taking activities may spillover and limits the upside potential on the local front.

The profit taking activities persisted on both the local and global stock markets after a significant rally over the past few weeks. We believe traders may stay cautious as the 10-year Treasury spiked following the jump in oil price (due to supply cuts from Saudi and Russia towards end-December). With both the Treasury yield and oil price on a rising formation, the market could be expecting that the Fed may stay slightly hawkish in the near term, which may pose downside risk towards the stock markets. Also, traders may monitor the developments on the 2 Johor by-elections that will be held this weekend.

After a significant run in the lower liners, the market stayed muted yesterday. We expect the consolidation may continue for the near term as (i) Australia (Tue) and Malaysia (Thurs) will announce the interest rate decision this week, (ii) China’s PMI and export data will be released, and (iii) Australia’s GDP will be released tomorrow. Hence, the traders may trade cautiously ahead of these events. Should there be any further slowdown of the China economic activities, that may dampen the risk appetite on the stock markets. Nevertheless, the domestic catalysts such as both the NETR and NIMP blueprints may support the local stock markets at least for the near term.

The FBMKLCI managed to close firmer with the buying support within the Telco heavyweights. Given the Wall Street traded higher for the first day of September, it is likely the buying interest may spillover towards stocks on the local front, especially the Technology sector. We believe the softer-than-expected jobs data last week suggested that the Fed may hold on to the current interest rate environment and may provide upside potential towards the stock markets. Meanwhile, we believe the overall local bourse may stay bullish with the launching of NETR and NIMP 2030 over the past few weeks.

The FBM KLCI traded softer prior to the public holiday as profit taking activities emerged. Meanwhile, the Wall Street traded mixed as the heavy-technology-Nasdaq index gained momentum despite the core PCE ticked higher this month, but it was within market’s expectations. We believe traders will be monitoring more clues from the August payroll that will be out later today. Should the payroll data come in below expectation, it will provide the Fed reason to pause further on the interest rate hike. On the local front, we expect greater trading activities, supported by the news flow regarding the National Industrial Master Plan (NIMP).