Market Review

MY: The local bourse closed on a cautious note today, dragged by losses in key heavyweights like PMETAL and YTL. Market breadth was negative with 677 losers outpacing 436 gainers. Sector wise, Energy (+1.17%) outperformed, led by DIALOG (+2.0 sen) and SLVEST (+11.0 sen), while Telecommunications (-1.97%) lagged.

US: Wall Street ended mixed with the Dow falling 0.3%, while both S&P 500 and Nasdaq ended flattish at 7,704.1 and 26,939.4 respectively, as 10Y US yields surged to 5.2% (+0.9%). Brent oil jumped +3.4% to USD106 following heightened Middle East geopolitical tensions after the US Senate voted down an Iran war resolution.

The Day Ahead

US: Wall Street may remain volatile as Brent crude holds above USD100/bbl and the US 10-year yield stays around 5.1%, keeping inflation and rate-hike concerns in focus. Energy and defence names returned to the main stage. ExxonMobil (XOM) offers direct exposure to higher oil prices through its upstream operations, while ConocoPhillips (COP) provides further leverage to elevated crude prices alongside strong cash generation and plans to return 45% of operating cash flow (CFO) to shareholders in 2026. Meanwhile, Lockheed Martin (LMT) could attract attention after securing a USD1.2bn US Army Precision Strike Missile contract, adding to its record USD230.4bn backlog.

MY: Closer to home, we expect the FBM KLCI to remain cautious amid elevated yields and oil prices, with upstream O&G counters likely to draw trading interest. HIBISCS offers direct oil-price exposure, with July production reaching c.32,000 boe/d and FY2027 sales guided at 10.7–11.2 million boe. Meanwhile, DAYANG remains supported by its >RM4.0bn order book, with a RM1.0bn Saudi MCM tender providing additional upside potential. Elsewhere, DELEUM retains earnings visibility on its RM2.4bn order book, supported by ongoing production optimisation, maintenance, and asset-enhancement activities.