Market Review

MY: Tracking Wall Street’s positive performance last Friday, the local bourse kickstarted the week higher, buoyed by gains in the banking heavyweights including PBBANK and CIMB. Sector-wise, Technology (+1.74%) continued to outperform, led by gains in VITROX and UWC, while Construction (-1.46%) declined the most.

US: Wall Street closed higher on Monday as muted oil prices following recovering Middle East crude exports offset a continued sell-off in U.S. Treasuries. The Dow, S&P 500 and Nasdaq advanced by 0.2%, 0.7% and 1.1% respectively, while the Brent crude and 10-year Treasury yield reached USD100.3 and 5.3%, respectively.

The Day Ahead

US: Given the broadly in-line Services PMI and ISM Non-Manufacturing PMI data, attention will now shift towards the FOMC meeting minutes overnight Thursday. Stock-wise, we favour Amazon (AMZN), supported by its USD496bn AWS-related backlog and USD220bn 2026 CapEx outlook as it aggressively expands AI data-centre capacity amid strong cloud and AI demand. This should also benefit Astera Labs (ALAB), given its exposure to AWS’s next-generation Trainium infrastructure through its Aries Retimers and Scorpio Smart Fabric Switches. Hence, AMZN’s aggressive data-centre expansion should provide a strong demand tailwind for ALAB. Lastly, investors could also look at Arista Networks (ANET), supported by the rollout of its next-generation 1.6Tb networking platform for AI infrastructure.

MY: Locally, we expect investors to remain selective ahead of the Budget 2027 announcement, with attention centred on potential beneficiary sectors. M&E players could continue to see buying interest, supported by the government’s emphasis on AI infrastructure and TNB’s 500kV National Grid Backbone project, favouring companies such as MNHLDG, SGCBHD and POWERWELL. Efforts to reduce non-revenue water could also remain in focus, potentially benefiting companies such as ISF and RANHILL. Lastly, 99SMART could see renewed buying interest on expectations of higher consumer assistance allocations under SARA and STR.