KUALA LUMPUR: Expectations of continued interest in plantation stocks amid rising crude palm oil price and the US Federal Reserve (Fed) rate cut are set to counterbalance potential election-related fluctuations, stabilising Bursa Malaysia’s performance this week.
Rakuten Trade Sdn Bhd’s equity research vice-president, Thong Pak Leng, said the plantation sector’s appeal has drawn additional investor interest and supports market resilience against global economic challenges.
He believed the recent pullback, in which the FTSE Bursa Malaysia KLCI (FBM KLCI) dipped below the key support level of 1,600 points, offers an appealing entry point for both short-term and long-term investors.
“With cheaper valuations and oversold signals emerging, there is potential for accumulation and recovery,” he said, adding that this may see the benchmark index trending within the 1,600-1,630 range this week.
Meanwhile, UOB Kay Hian Wealth Advisors head of investment research Mohd Sedek Jantan said the Federal Open Market Committee may act decisively to maintain neutrality in the immediate post-US presidential election environment.
“While the election outcome will likely shape US market sentiment, we expect minimal direct impact on Malaysian markets, as local investors have largely taken a cautious stance. Consequently, a wait-and-see approach may dominate trading, with investors in Malaysia watching Wall Street’s reaction closely and considering the implications for US economic policy,” he said.
Current market consensus expects a 25-basis-point rate cut, lowering the federal funds rate to 4.50%–4.75%, with this decision reflecting easing inflation towards the Fed’s 2% target and a slight rise in the US unemployment rate, indicating labour market softening.
Mohd Sedek noted that key sectors sensitive to interest rates, including real estate, finance, and consumer goods, may experience renewed interest.
Lower rates could also ease financial pressure on Malaysian companies with US dollar-denominated debt.
“October was a challenging month for the FBM KLCI, which experienced selling pressure, declining from 1,656 at the start of the month to close October at 1,601, a drop of over 50 points. This dip may attract bargain hunters, and we foresee that post-election, investors could begin repositioning portfolios as early as one week after the election,” he said.
On the domestic front, investors will closely watch economic indicators for September, including wholesale and retail trade on Thursday and industrial production and manufacturing data on Friday, which will provide insights into Malaysia’s third-quarter (Q3) economic performance.
“With preliminary Q3 estimate at 5.3%, these figures are critical for assessing economic momentum,” Mohd Sedek said.
Last week, on a Friday-to-Friday basis, the FBM KLCI fell 14.32 points to 1,603.98 from 1,618.30 in the previous week.
Turnover declined to 9.60 billion units worth RM9.88 billion versus 14.05 billion units worth RM11.74 billion in the previous week. Main Market volume dwindled to 5.30 billion shares valued at RM8.88 billion from 7.69 billion shares valued at RM10.41 billion in the previoust week while ACE Market volume slid to 1.71 billion shares valued at RM598.99 million compared with 1.98 billion shares valued at RM679.27 million previously. – Bernama
