KUALA LUMPUR (April 9): MBSB Research recommends investors take advantage of the rebound in laggard sectors such as construction and consumer following the US-Iran ceasefire, as long as the situation remains stable, while also allocating funds to defensive stocks as a safeguard against potential renewed tensions.
In a note on Thursday, the firm said defensive stocks provide stable dividends that help limit downside risks and may also offer price appreciation due to undervaluation.
The markets reacted positively to the news, with previously weak sectors — construction, consumer, technology, finance, and real estate investment trusts (REITs) — rising on Wednesday after weeks of volatility, showing improved investor sentiment. The KLCON Index rose 2.5%, KLTEC gained 4%, consumer stocks up 2.1%, and REITs climbed 1.8%. However, all indices retreated in early morning trade on Thursday, highlighting the continued volatility and uncertainty in the market.
MBSB added that investors can continue exploring laggard sectors amid improving sentiment, provided there is no breakdown in US-Iran negotiations that could trigger renewed escalation.
However, given the still uncertain outlook, it advises maintaining exposure to defensive sectors for protection.