Can the Santa Claus rally happen after the Fed's hawkish cut?
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Malaysia market commentary (18 Dec 2024)
Ken Low
joined discussion · Dec 18, 2024 08:39
Global markets
All three US indices were in small red whereby DJ (-0.61%) declined 9thday consecutively. Nasdaq (-0.33%) retreated gain from multiple record breaking of historical high.
Retail sales of +0.7%, higher than consensus of 0.6%, highlighting that US economy is growing at a healthy pace.
Fed is widely expected to cut interest rates by 25 bps tomorrow. The focus will be on the pace of easing in year 2025. Market fully price in 1 cut of 0.25% this year and 2 cut in year 2025. “Hawkish” tone tomorrow may not be a good signal to equities.
Local Macro
As expected, USDMYR closed higher to 4.4665 (+140 pips) gradually in 1 week time. This can be attributed to year-end flow, arisen from dividend repatriation by corporates. Local govvy 10-year yield settled unchanged at 3.85%.
KLCI Performance
KLCI couldn't defend 1,600 level and retraced back to 1,597 (-9.52) with traded volume of MYR 2.43 billion.
Malaysia equity flow (MYR million)
Most sectors were in a sea of red; only telecommunication and utilities made small gain. Others were lack of momentum. Investors were waiting for more cue.
Stocks on focus:
Year 2024 was not a good year for GENTING and GENM. Both companies will be replaced by 99SMART and GAMUDA as index constituents, effectively next Monday (23rd December). Both names encountered selling pressure and hit the lowest level since March 2021.
Bloomberg source: GENTING graph and volume
Bloomberg source: GENM graph and volume
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