Data Centre Plays PEKAT, AWC in Focus as S&P Rebalances

The local bourse brushed off surging US Treasury yields and Federal Reserve jitters on Tuesday, with the benchmark FBM KLCI climbing on the back of strength in energy stocks TENAGA and PETGAS—but market breadth painted a cautious picture, showing 603 losers against 484 gainers. According to Malacca Securities Research, the next catalyst lies in S&P Dow Jones Indices’ quarterly rebalancing, which will reshape sector positioning on Wall Street when markets reopen after the US Labor Day holiday.

Data Centre Infrastructure Boom Drives Stock-Specific Interest

Malacca Securities identified PEKAT as the standout name, having just landed three subcontracts worth RM57.2 million for earthing and lightning protection works at a hyperscale data centre in Johor. These are mission-critical roles in data centre construction—electrical earthing systems prevent catastrophic surges, while lightning protection is non-negotiable for uptime-sensitive infrastructure serving cloud and AI workloads.

AWC similarly caught the research house’s eye after bagging a RM23.1 million data centre subcontract, extending its footprint in what M+ Online’s team calls “mission-critical infrastructure.” Both stocks benefit from Malaysia’s positioning as a lower-cost, politically stable alternative to Singapore for hyperscale facility buildout.

Broader Recovery Signals in Select Counters

Beyond the data centre narrative, Malacca Securities flagged COASTAL for staging a 52-week-high breakout following a robust first-half 2026 profit of RM201.2 million. The research house also highlighted ECA, which has returned to profitability in 4Q25 after prior losses, with first-half 2026 profit after tax reaching RM3.23 million versus a RM6.64 million loss in the corresponding prior-year period.

On the sectoral level, Healthcare outperformed the broader market, gaining 0.7% on strength in PHARMA and KPJ, while Transportation & Logistics lagged the most, sliding 0.7%. The mixed backdrop reflects investor caution over Middle East tensions—Brent crude oil rose to near USD98 per barrel amid fading hopes for a near-term Iran nuclear agreement.

Global Backdrop: US Tech Positioning, Oil Tensions

Wall Street’s reopening will refocus attention on AI infrastructure plays, particularly Micron Technology (MU), which is ramping high-bandwidth memory shipments with HBM4 already in high-volume production and guidance for fourth-quarter fiscal 2026 revenue around USD50 billion. Dell Technologies (DELL) remains well-supported by record USD95 billion backlog in AI servers, while Super Micro Computer (SMCI) continues to gain from record AI infrastructure orders and expanding liquid-cooling solutions.

European markets remained mixed on Tuesday—the Stoxx 600 was flat, while France and Italy posted modest gains—as geopolitical risk kept a lid on risk appetite. Malacca Securities expects the local FBM KLCI to extend gains on “a selective footing,” meaning stock-specific catalysts will likely outweigh sector-wide moves.

Valuation and Risk Considerations

The research house did not publish explicit target prices or earnings forecasts for PEKAT or AWC in this briefing, but the nomination of both stocks for near-term upside is typically rooted in contract flow visibility and margin expansion as data centre projects ramp. Retail investors should note that subcontracting revenue, while predictable, carries execution risk if supply chains or labour availability tightens.

Oil price volatility and Middle East geopolitical friction remain two-way risks. A swift de-escalation could weigh on energy stocks, while further tensions could benefit defensive plays and energy infrastructure. Currency moves—particularly USD strength—could also affect the competitiveness of Malaysia-based data centre operators relative to Singapore and Hong Kong peers.

What This Means for Retail Investors

Data centre infrastructure plays are structurally attractive because cloud adoption and AI workload growth are secular tailwinds. However, Malacca Securities’ emphasis on PEKAT and AWC rests on tangible subcontract wins—these are not speculative stories. Retail investors tracking these counters should monitor project execution timelines, gross margins on new contracts, and the pipeline of future hyperscale capacity announcements.

The broader lesson: in a mixed global backdrop marked by Fed uncertainty and geopolitical noise, stock-specific catalysts—not broad sector rotation—are driving the FBM KLCI higher. This favours investors with company-level conviction over macro traders.

For the full Malacca Securities research report and detailed valuation metrics, visit M+ Online.

Key Takeaways

• Malacca Securities flagged PEKAT and AWC as data centre infrastructure beneficiaries following RM57.2m and RM23.1m subcontract wins respectively.
• The FBM KLCI climbed on energy strength (TENAGA, PETGAS) but faced negative breadth, signalling selective gains ahead driven by stock-specific catalysts rather than sector moves.
• COASTAL and ECA are riding recovery narratives with 1H26 profit of RM201.2m and return to profitability respectively, per the research house.
• Global AI infrastructure demand remains robust—Micron’s HBM4 ramping and Dell’s USD95bn backlog underscore secular tailwinds for Malaysian data centre operators.
• Middle East tensions keeping oil near USD98/bbl and European equities mixed; Malacca Securities expects local market to extend gains on selective basis amid mixed global backdrop.

Disclaimer: This article is for informational and educational purposes only and does not constitute financial advice or a recommendation to buy or sell any security. Ratings and target prices cited are those of Malacca Securities Research and are subject to change. Always do your own research before making investment decisions.

Want access to full M+ Online research reports and AI stock analysis? Contact Dexter Chia, AI-Driven Remisier at Malacca Securities Sdn Bhd. M+ Global Invitation Code: UBZQ | WhatsApp: +60169059789 | Why Choose Dexter?