Market Review

MY: Amid escalating geopolitical tensions, Brent crude oil surged above US$100/bbl, with heightened uncertainty contributing to a muted session on the local bourse. Sector-wise, Construction (+1.59%) outperformed, led by GAMUDA and KERJAYA, while Financials (-0.50%) was the weakest performer.

US: Wall Street closed lower on Wednesday as disappointment over the U.S. Treasury’s bond buyback plan triggered a sell-off in Treasuries, while escalating Middle East tensions pushed Brent crude above US$100/bbl. The Dow, S&P 500 and Nasdaq retreated by 0.8%, 0.5% and 0.6%, respectively.

The Day Ahead

US: Given the ongoing U.S.–Iran military escalation that pushed oil prices above US$100/bbl, Wall Street is expected to remain in a risk-off environment. Nevertheless, we believe investors could position in fabless semiconductor player Marvell Technology, supported by management’s upgraded multi-year guidance of c.US$12bn revenue in FY27 and c.US$18bn in FY28, underscoring rapidly expanding demand for custom ASIC accelerators and high-speed optical interconnects. Meanwhile, with markets pricing in a 62.2% chance of a 25bps rate hike this month, which could favour banking stocks such as Morgan Stanley and Citigroup.

MY: Tracking Wall Street’s overnight weakness, we expect the local bourse to remain soft, although the data centre theme remains intact, with Construction and selected Technology stocks likely to stay in focus. Meanwhile, GTA saw a knee-jerk sell-off following news of a Sarawak helicopter crash, which is unrelated to its operations. We believe GTA’s investment thesis remains intact, supported by recurring sovereign defence contracts, upcoming budget catalysts and backing from cornerstone investor LTAT. Hence, we view the weakness as an accumulation opportunity, with our fair value unchanged at RM0.58. Similarly, investors could accumulate KPJ following its technical selldown since late August, presenting a value-picking opportunity in a fundamentally solid company.