Opening Daily Highlight
Mixed
Encouraging US CPI data may lift sentiment
Thu, 16-Jan-2025 07:23 am
by Research Team • Apex Research

Market Review & Outlook

Malaysia Market Review: The FBM KLCI reversed all its intraday gains to extend its decline for the third straights session. Meanwhile, the broader market was whiplashed with over 900 stocks closed in red, reflecting pessimism. This mirrored weaker regional markets ahead of the US CPI data release. All 13 major sectors closed in the red with the Construction sector (-4.8%) taking the heaviest beating.

 

Global Markets Review: US stock markets surged after the CPI data revealed an unexpected slowdown in core inflation for Dec 2024, while major US banks reported strong quarterly earnings. Wall Street finished in positive territory, with the Dow up 1.65%, the S&P 500 rising 1.83%, and the Nasdaq gaining 2.45%. The data showed the CPI rose 3.2% year-over-year, and headline inflation increased 2.9% yoy in Dec 2024, both in line with market expectations. Meanwhile, European markets saw the STOXX Europe 600 close 1.3% higher, snapping a three-day losing streak and recording its best performance since August 2024. All sectors were positive, led by retail stocks, which rose 2.7%. In the APAC region, markets closed mixed. Japan's Nikkei 225 slid 0.08%, the Hang Seng Index rose 0.34%, South Korea's KOSPI erased 0.02%, and China's Shanghai Composite Index dropped 0.43% due to uncertainty over U.S. market direction.

 

Market Outlook: Following the recent pullback, we expect market sentiment to improve as US CPI data came in line with consensus expectations. Combined with strong earnings reports from major banks, this could further boost the overall stock market. The FBM KLCI will likely attempt a rebound over the near term as bargain hunting activities in beaten down stocks takes precedence. Meanwhile, investors will watch China's Q4 2024 GDP and industrial production data, tentatively to be release tomorrow.

 

Sector focus. We reckon the sharp gains in oil prices resulted from the larger drawdown in inventory level may lift the energy sector. Meanwhile, plantation sector may face some pressure owing to the decline in CPO prices which closed near 3-month low.

 

FBMKLCI Technical Outlook

Technical Commentary: The FBM KLCI took another step backwards as the key index trended further from the 1,600 psychological level yesterday. Indicators remained negative as MACD Line fell below the Signal Line, while the RSI lingered below 50. Immediate resistance is located at 1,600. Support is envisaged around 1,530.

 

Company News (source: various)

The Consortium Gateway Development Alliance (GDA) has extended the deadline for its takeover offer of Malaysia Airports Holdings Bhd (MAHB) to Jan 24, after previously extending it from Jan 8 to Jan 17. As of Jan 15, GDA, which includes EPF, Khazanah, ADIA, and GIP, has secured 86.18% of MAHB's shares, just short of the required 90% acceptance rate.

 

Southern Score Builders Bhd bags RM78m contract to upgrade works to a detention pond in KL. The contract period of the project will be for 12 months, commencing on Jan 15 until its projected completion on Jan 14, 2026.

 

A consortium led by SC Estate Builder Bhd has secured a contract to develop a 4MW solar project in Perlis. The group plans to fund the project through a mix of debt and equity, stating that it is not expected to significantly impact the company's gearing position.

 

KJTS Group Bhd plans to operate cooling and mobile facility maintenance services in Singapore through a joint venture with Cyclect Investments Pte Ltd. The JV will focus primarily on cooling services.

 

Sunview Group Bhd's subsidiary, Sirage Energy, has partnered with Sirage Skyvast to explore developing an off-grid solar power plant at Perlis Advance Tech Park (PATP) in Chuping. Sirage Energy will manage technical aspects, while Sirage Skyvast will handle infrastructure and integration.

 

Poh Kong Holdings Bhd expects stronger sales in 2025, driven by a positive retail outlook and economic growth in Malaysia. The company plans to open two new outlets this year and notes that the anticipated luxury tax is likely to be put on hold.

 

VS Industry Bhd won a minority shareholder oppression case against NEP Holdings Bhd and its directors. The High Court ruled that NEP Holdings and its directors acted oppressively towards VS Industry, ordering NEP to be wound up.

 

Ahmad Zaki Resources Bhd has redesignated Datuk Seri Wan Zakariah Wan Muda as its executive vice-chairman, filling a position left vacant after the passing of his brother, Tan Sri Wan Zaki Wan Muda.

 

Rexit Bhd has appointed Kelantan royal member Tengku Tan Sri Mohamad Rizam as its new independent chairman, replacing Datuk Seow Gim Shen, who resigned before being jailed for data offences in Singapore.

Sentiment: Positive
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