Market Review

MY: Tracking Wall Street's rebound last week, the FBM KLCI kickstarted the shortened trading week on a positive note, with gains in key heavyweights such as CIMB and PCHEM leading the key index higher. IPO UNIPAC debuted on the ACE Market yesterday, closing at RM0.31 compared to its IPO price of RM0.35.

US: Wall Street closed lower on Monday as tech sector weakness, triggered by calls to slow AI development and elevated oil prices weighed on sentiment, though potential US–Iran diplomatic talks helped pare session losses. The Dow, S&P 500, and Nasdaq retreated by 0.3%, 0.5%, and 0.6%, respectively.

The Day Ahead

US: With Wall Street entering the first day of the September FOMC meeting, coupled with oil prices staying elevated above the USD107/barrel mark, we expect Wall Street to extend its cautious trading sentiment. While Anthropic CEO Dario Amodei and OpenAI leadership called for a deliberate slowdown in frontier LLM development over safety concerns, we view this as a temporary knee-jerk market reaction, creating buy-on-dip opportunities in the tech sector. We continue to favour Marvell Technology (MRVL) despite its pullback, supported by its combined FY27 and FY28 revenue outlook of USD30bn and its custom silicon partnership with Alphabet (GOOGL), while the latter is also favoured due to its Google Cloud acceleration.

MY: Given that the local bourse will be closed tomorrow while the US enters its FOMC meeting later today, we anticipate a softer tone for the FBM KLCI today. Meanwhile, the elevated oil price environment should bode well for chemical-related companies such as LCTITAN and SAMCHEM. While the AI slowdown commentary in the US might temporarily affect sentiment for local technology counters, we continue to favour factory automation solutions provider GREATEC, supported by its RM1.8bn order book, with DC-related jobs now accounting for more than half of its outstanding contracts. The RM1.8bn order book translates into 2.4x FY25 revenue, with management expecting RM2.0bn by year-end.