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Ended the year on a positive note
Thu, 02-Jan-2025 07:30 am
by Research Team • Apex Research

Malaysia Market Review: The FBM KLCI bucked the regional downtrend and ended the day on a positive note after a weak start, advancing 0.3% on the final trading day of the year. The gains were driven by Axiata and Petronas Chemicals amid year-end window dressing activities. Sector performances were mixed, with the Transportation and Logistic Index (+0.7%) and Property Index (+0.5%) leading the gains, while the Construction Index (-0.9%) was the top laggard.

 

Global Markets Review: Wall Street wrapped up 2024 on a sour note, with all three indices closing in the red as elevated Treasury yields again contributed to a lacklustre close. In Europe, the panEuropean Stoxx 600 added 0.6% in a thinly-traded session, as bourses in several markets were closed. Elsewhere in Asia, markets mostly fell, with trading closed in Tokyo and Seoul for New Year holidays. Shanghai Composite plunged 1.6% after Chinese manufacturing data showed that factory activity expanded at a slower pace in December, suggesting that Beijing's stimulus measures have not been sufficient to boost the nation's sluggish economy.

 

Market Outlook: With the conclusion of the year-end window dressing activities lifting the key index to close 12.9% yoy higher in 2024, we expect the benchmark index to face some profit taking pressure. Similarly, lower liners are expected to experience selling pressure following several days of gains. Manufacturing data will be in focus this week, with the US, China, EU and Malaysia set to release their manufacturing PMI figures. Looking ahead, investors should brace for a potentially more volatile 2025, as uncertainties surrounding Trump’s second term, geopolitical risks, and the Federal Reserve’s rate cut trajectory are expected to weigh on market sentiment.

 

Sector focus. Following the conclusion of the year-end window dressing activities, we anticipate profit taking activities in sectors that have marched higher over the past few trading sessions, such as property and utilities sector. In contrast, the energy sector may attract some bargain hunting activities following gains in crude oil prices. Nonetheless, investors are advised to steer clear of OGSE companies heavily reliant on contracts from Petronas, as the company has announced that it is reviewing its productivity in response to report suggesting potential workforce reductions linked to its gas distribution agreement with Petroleum Sarawak Bhd.

 

Technical Commentary: The FBM KLCI advanced for the fifth straight session to drift higher from SMA50. After a solid performance lately, a potential consolidation may take shape. Indicators stayed positive as MACD Line hovered above the Signal Line, while the RSI trended above 50. Immediate resistance is located at 1,645. Support is envisaged around 1,600.

Sentiment: Positive
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