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Volatility beckons
Tue, 21-Jan-2025 07:14 am
by Research Team • Apex Research

Market Review & Outlook

Malaysia Market Review: The FBM KLCI (+0.36%) edged higher which aligned with the predominantly positive trend in regional markets yesterday. The lower liners also marched upward, while the Energy sector (+1.77%) led gains across the board with only the Financial sector (-0.05%) closed in red.

 

Global Markets Review: Wall Street was closed in conjunction with Martin Luther King Jr public holiday, while futures markets are pointing towards a positive opening. European stock markets advanced, supported by the strengthening of the Euro and British pound against the US dollar. Similarly, Asian markets broadly rose as investors awaited clearer insights into the policies of the incoming US administration.

 

Market Outlook: The upward momentum in the FBM KLCI appears to be fading after the key index marginally surpass the 1,570 resistance level. Nevertheless, volatility may persist following Trump’s inauguration in view that potential tariffs remain on the table, aimed at taxing foreign countries as a trade protectionism move. We reckon that foreign funds will likely remain net sellers as foreign investors are likely to stay cautious toward emerging markets under the new US administration. Meanwhile, lower liner stocks may undergo consolidation as investors adopt a more defensive stance ahead of the upcoming Chinese New Year festive period. For now, investors will be monitoring onto UK unemployment rate later today. 

 

Sector focus. We expect optimism to prevails within the oil & gas stocks amid speculation of reduced Russian exports due to heightened US sanctions. Conversely, we continue to advocate investors to stay clear on the plantation sector given the downward trend in CPO prices.

 

FBMKLCI Technical Outlook

Technical Commentary: The FBM KLCI extended it recovery trend to form another bullish candle as the key index solidify its positive above the lower Bollinger Band yesterday. Indicators remained negative as MACD Line lingered below the Signal Line, while the RSI is below 50. Immediate resistance is located at 1,600. Support is envisaged around 1,530.

 

Company News (source: various)

A consortium led by Khazanah Nasional Bhd is revising the terms for its takeover offer for Malaysia Airports Holdings Bhd to lower the acceptance conditions to at least 85%.

 

Convenience store chain operator 7-Eleven Malaysia Holdings Bhd, in which Berjaya Group founder Tan Sri Vincent Tan owns a 28.07% stake, is setting up 100 original cash recycling machines (CRM) at its outlets across Malaysia.

 

Fajarbaru Builder Group Bhd has signed the master purchase and development agreement with Penang Development Corp (PDC) for the first phase of the Penang Medi-City project in Batu Kawan.

 

WTK Holdings Bhd said a fire broke out at its unit’s tape manufacturing factory in Perai, Penang, on Jan 17.

 

UUE Holdings Bhd has secured two contract renewals worth a total of RM27.5 million from Sutera Utama Sdn Bhd.

 

SkyWorld Development Bhd has proposed to diversify into manufacturing prefabricated and prefinished modular systems, which it plans to employ in its affordable housing project in Penang.

 

Mieco Chipboard Bhd is disposing of two pieces of industrial land in Kuantan, Pahang, for RM40 million to transportation company G-Force Sdn Bhd, in a bid to reduce fixed overhead costs and improve production efficiency.

 

Maxland Bhd’s wholly owned units Maxland Energy Sdn Bhd and Maxland Real Sdn Bhd have inked a formal deal to collaborate with data processing services provider GDC Data Sdn Bhd to jointly venture into data centre development in Kulim, Kedah.

 

Sentiment: Positive
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