KLCI: 1,774.95 (+6.67 pts)
DOW: 20,894.83 (+89.99 pts)
MSCI ASIA Pac (MXAP): 152.30 (+1.51 pts)
FCPO: RM2,662 / MT (+27)
BRENT: US$53.87 / bbl (+0.26)
USD: 4.305 (-0.017 pts)
SGD: 3.106 (-0.002 pts)
EUR: 4.815 (-0.003 pts)
GBP: 5.593 (-0.026 pts)
US: 10-yr yield (+0.02 to 2.25%)
BNM: 10-yr yield (+0.01 to 3.87%)

Cut off time: 7.45am (23 May 2017)

US: Although investors were concerned about the US political turmoil, focus has turned to the US$110b weapon deal between US and Saudi Arabia, which has seen buying interest emerged among defense stocks.

Asia: Tracking the recovery in US markets, Asian equities were mostly higher led by Hang Seng Index with an increase of 0.86%, while Nikkei 225 added 0.45%. Meanwhile, Kospi Index rose 0.68% despite a missile test by North Korea over the weekend.

Bursa Malaysia: On the local front, the buying sentiments were subdued throughout the trading session before ending at an intraday high of 1,774.95 pts (+0.38%) led by Petronas-related index heavyweights on the back of a recovery in oil price ahead of OPEC meeting. Market breadth stayed positive with gainers led losers by a ratio of 5-to-4.

Outlook: We see signs of relief buying after the political scandal in US and this may support the Dow over the immediate term to revisit the all-time-high of 21,178. Also, energy shares are likely to focus on the back of slight recovery on crude oil prices ahead of the OPEC meeting. Meanwhile, buying flow on the local bourse should remain steady, tracking the positive recovery on Wall Street, coupled with the steadier crude oil prices. We opine that O&G sector could see some revival in trading interest following softer focus over the past weeks.

STOCK ON RADAR
Trading Buy: COMFORT
Period: 4 weeks
Last px: 0.72
Upside: 0.77/0.81/0.94
Downside: 0.705/0.69
Cut loss: 0.675
Trading catalyst: Comfort Gloves Berhad (CGB) offers wide range of quality gloves for the export markets. CGB is planning to install additional 8 production lines in FY18 to total production lines of 48, which will boost their capacity by at least 20%. Also, we opine that the management would be able to pass on the cost in the upcoming results with a potential revision in ASP, eventually showing normalisation in GP margins after a mild GP margin squeeze of 2% in the 4QFY16 results on the back of higher raw material prices.

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KLCI: 1,767.17 (-7.78 pts)
DOW: 20,937.91 (+43.08 pts)
MSCI ASIA Pac (MXAP): 151.87 (-0.43 pts)
FCPO: RM2,617 / MT (-45)
BRENT: US$54.15 / bbl (+0.28)
USD: 4.294 (-0.011 pts)
SGD: 3.096 (-0.010 pts)
EUR: 4.831 (+0.016 pts)
GBP: 5.578 (-0.015 pts)
US: 10-yr yield (+0.03 to 2.28%)
BNM: 10-yr yield (-0.01 to 3.86%)

Cut off time: 7.45am (24 May 2017)

US: Wall Street continued to advance for the fourth consecutive trading days as investors turned their focus on Trump's budget plans, aiming to cut government spending by US$3.6 trillion, while increasing the infrastructure and military spending. The Dow retested the 21,000 psychological level and ended at 20,937.91 pts (+0.21%).

Asia: Asian stock markets ended mostly lower as sentiments turned negative amid the deadly bombing news in Manchester, which killed 22 persons. The Nikkei 225 fell 0.33% as yen strengthened mildly.

Bursa Malaysia: After the FBM KLCI crept higher near the 1,780 level, selling pressure emerged led by Petronas Gas and IHH and most of the stocks on the broader market trended into the negative region as Brent crude oil eased below US$54.

Outlook: In the US, following the recent buying support which has sustained the Dow to revisit the resistance of 21,000, we opine that investors may adopt a cautious stance ahead of OPEC meeting. Also, investors will need to understand more of the Trump’s budget details before investing aggressively into the markets. However, shares on Bursa Malaysia could be due for a mild technical rebound following the selling activities yesterday. Trading interest is likely to hover around the O&G sector as the Brent crude oil traded near US$54 and traders may look for opportunities amid the on-going reporting season.

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