Malaysia Morning Wrap | SNS and Mimos Sign a Memorandum of Understanding To Develop Artificial Intelligence

The market climbed on Friday, pushing the S&P 500 and Nasdaq to record closes. This followed both indices setting new highs in trading prices after unemployment data matched expectations for an increase, fueling hopes that interest rates might be cut again in December.

After November's payroll data showed job growth in line with expectations, investors increased bets on a US rate cut. Futures now indicate an 89% chance of the Fed cutting rates by 25 basis points at its December 18 meeting, up from 68% earlier. Non-farm payrolls added 227,000 jobs, closely matching forecasts.

This supports expectations for further Federal Reserve policy rate reductions, as stated by Jamie Cox from Harris Financial Group. Following the data release, Treasury yields fell, with the two-year note yielding 4.096% and the 10-year yield at 4.157%.

The FBM KLCI is anticipated to experience upward momentum next week, driven by robust market participation and positive sentiment from favorable domestic and external economic indicators. UOB Kay Hian Wealth Advisors head of investment research Mohd Sedek Jantan stated. Key factors supporting this outlook include Malaysia’s strong October export growth, particularly in electronics and electrical exports, and optimism over a potential US Federal Reserve rate cut in December, which could benefit Malaysian tech firms.

Additionally, interest in data center supply chain stocks and the development of 5G services are enhancing Malaysia's appeal to investors. Despite uncertainties regarding foreign capital inflows, Malaysia’s stable interest rates, clear policy direction, and positive credit rating outlook continue to attract investment.

Seasonal year-end portfolio rebalancing may further boost the equity market, though this effect is typically short-term. The FBM KLCI has stabilized above the 1,600 level, with potential for short-term bullish movement if it breaks above 1,617, targeting levels at 1,625 and 1,650. For the coming week, the index is expected to trade within the 1,605–1,625 range.

Colform Group Bhd, a specialist in steel and building materials based in Sabah, has signed an underwriting agreement with Mercury Securities Sdn Bhd in preparation for its upcoming listing on the ACE Market of Bursa Malaysia.

Winstar Capital Bhd, a manufacturer of aluminum products, has seen its initial public offering attract retail investor interest worth RM413 million, nearly 21 times the RM19.8 million it aimed to raise from issuing new shares for its listing.