Opening Daily Highlight
Mixed
Eyes on CPI data in US
Tue, 14-Jan-2025 07:05 am
by Research Team • Apex Research

Market Review & Outlook

Malaysia Market Review: The FBM KLCI index was traded in tune with regional markets negative performance, falling 1.05% to close at 1,583.02 pts, slipping well below the key psychological level of 1,600 on hotter-than-expected US payroll data. Market sentiment was broadly negative with only the Energy sector (+0.3%) finished in the positive territory, lifted by firmer crude oil prices.

 

Global Markets Review: US stock markets were mixed, with the Dow and S&P 500 finished higher, while the Nasdaq slipped 0.38%. The US dollar index reached a two-year high after strong US jobs data, leading investors to speculate that the Federal Reserve may pull their breaks on future rate cuts, while US 10-year Treasury yields hit a 14-month high. Investors are awaiting Wednesday's US Consumer Price Index (CPI) report, which could provide clues over future rate cuts. The STOXX Europe 600 dropped 0.7% for the second consecutive day, in reactions to US jobs data. In the APAC region, markets were deeply in negative territory. Japan's Nikkei slid 1.05%, the Hang Seng Index fell by 1.4%, and South Korea's KOSPI dropped 1.07% due to net selling by foreign investors.

 

Market Outlook: Sentiment is expected to remain muted as global investors focus on Wednesday's Consumer Price Index (CPI) data and the central bank's Beige Book, which will influence the Fed's policy outlook. The FBM KLCI may attempt to rebound toward the psychological 1,600 level. Foreign funds will likely continue being net sellers in the local market, with global capital potentially shifting to US assets or Treasury securities. However, we opine that the recent the market pullback allows local investors to be selective on bargain hunting. Economic wise, Malaysia's wholesale and retail trade sector shows an increase of 4.7% yoy, reaching RM149.3bn in Nov 2024, the second-highest monthly sales of the year, according to the Department of Statistics Malaysia (DOSM). Meanwhile, investors will be monitoring over US PPI data later tonight.

 

Sector focus.  We remain optimistic about export-oriented sectors, as the stronger USD against a weaker MYR boosts competitiveness in global markets. We also maintain a positive outlook on the energy sector, including PCHEM, ARMADA, and YINSON, driven by rising energy prices and concerns about inflation. Crude oil has surpassed US$80 per barrel amid declining Russian exports due to increased US sanctions.

 

FBMKLCI Technical Outlook

Technical Commentary: The FBM KLCI resumed its downward momentum with the key index slipping below the 1,600 psychological level yesterday. Indicators were negative as MACD Line fell below the Signal Line, while the RSI lingered below 50. Immediate resistance is located at 1,625. Support is envisaged around 1,570.

 

Company News (source: various)

Gamuda Bhd wins a RM8.0 bn contract for the first phase of the Penang LRT project. Its consortium, SRS Consortium, will build the 24km Mutiara Line with 19 stations. Gamuda holds 60% of SRS, while Loh Phoy Yen Holdings and Ideal Property Development own 20% each. MRT Corp is the project developer and owner.

 

Yinson Holdings Bhd is close to securing US$1.0 bn (RM4.51 bn) from Abu Dhabi Investment Authority (ADIA), British Columbia Investment Management Corp (BCI), and RRJ Capital for its offshore oil and gas equipment unit. The trio is expected to subscribe to redeemable convertible preference shares this week, with an additional US$500.0 m investment planned later.

 

YTL Power International Bhd, which in the mist building AI data centers with Nvidia's latest chips, expects no impact from proposed US export rules on advanced chips to Malaysia. Managing director Datuk Seri Yeoh Seok Hong said the company is the first non-US firm in Asia to partner with Nvidia to deploy a supercomputer using GB200 Blackwell GPUs and is confident the export restrictions will not affect them.

 

Eden Inc Bhd announced that its subsidiary, Daya Cipta Sdn Bhd, has been chose to develop 29.99MW solar photovoltaic plant in Kuantan. The Energy Commission (EC) issued a letter of notification (LON) on Jan 10. As per the LON, the plant's export capacity must not exceed 29.99MW and will operate under a 21-year solar power purchase agreement with Tenaga Nasional Bhd. The plant's commercial operation is scheduled to begin no later than July 28, 2027.

 

Infomina Bhd secures US$2.9 (RM13 m) order from a Hong Kong-based technology firm. This is through its subsidiary Infomina Pte Ltd (Infomina SG), the company will provide technology services to Hong Kong Telecommunications (HKT) Ltd under a two-year agreement with PCCW Solutions Ltd. Infomina SG will handle licence renewals, staff training on installation and start-up, and oversee the installation of hardware and software systems.

 

Kimlun Corp Bhd sells plantation land in Kota Tinggi for RM55.0 m to KT Techpark Sdn Bhd. Over the past three years, it produced 1,950 tonnes of fresh fruit bunches (FFB). According to Kim Lun's FY23 audited financials, the land incurred a net loss of RM500,000. The sale price is 59.9% higher than the land's net book value of RM34.5 m as of December 31, 2023.

 

Solarvest Holdings Bhd is acquiring three plots of land in Kedah for RM19.99 m in cash to secure land for renewable energy projects. Its subsidiary, Atlantic Blue Sdn Bhd, has signed agreements with Aziho Trading Sdn Bhd for the 48.86ha land in Mukim Gurun, Kuala Muda. The company expects the land to offer opportunities for EPCC contracts, recurring income from electricity sales, and/or future land lease income.

 

Sapura Energy Bhd has obtained a second approval-in-principle for its debt restructuring plan, with 75% of financiers on board. This clears the way for court meetings with creditors and potential investment from a white knight.

 

Apex Equity Holdings Bhd is seeking a court order to replace its memorandum and articles of association (M&A) with a new constitution to meet Bursa Malaysia's listing requirements.

Sentiment: Neutral
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Market Mover
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Currency Buy Rates (RM) Sell Rates (RM)
USD 4.373243 4.414705
EUR 4.565507 4.577376
CNY 0.602867 0.604630
HKD 0.561419 0.566456
SGD 3.236779 3.265133