Market Review

MY: The local bourse traded within a narrow range and ended marginally higher, supported by gains in PCHEM and MAYBANK. Market breadth was marginally negative, with 531 losers edging past 528 gainers. Sector-wise, Health Care (+1.66%) outperformed, while Telco & Media (-0.81%) was the weakest-performing sector.

US: Wall Street fell on Friday as surging oil prices and concerns over AI financing weighed on sentiment. The Dow, S&P 500 and Nasdaq declined 1.2%, 0.5% and 0.2%, respectively. Brent crude settled above USD117/bbl, adding to inflation concerns despite expectations that the Fed would hold rates steady at its upcoming meeting.

The Day Ahead

US: Following Brent crude’s surge above USD117/bbl on Friday amid Houthi attacks in Saudi Arabia, we expect cautious trading ahead of the Fed’s policy decision early Thursday, Malaysian time. Rates are widely expected to remain unchanged, with investors watching for signals on a potential December hike. Attention will also turn to results from Alphabet, Microsoft and Amazon, particularly their AI capex guidance. Stock-wise, we favour Palo Alto Networks (PANW), supported by an Evercore ISI survey indicating firmer cybersecurity budgets. Fortinet (FTNT) could also benefit from sustained security spending amid concerns over software vulnerabilities and AI-powered cyberattacks.

MY: Following the surge in oil prices, we expect the FBM KLCI to start the week on a softer note, although oil- and chemical-related counters such as DIALOG, PCHEM and TMK may attract trading interest. Glove makers HARTA, SUPERMX, KOSSAN and TOPGLOV could also draw interest if customers bring forward orders ahead of potential selling-price increases, although higher input costs remain a consideration. Separately, we issued our non-rated IPO note on power infrastructure engineering solutions provider SKACAP, with a fair value of RM0.66, implying 53.5% upside from its IPO price of RM0.43.