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Cautious trading persists amid external risks
Mon, 27-Jan-2025 07:10 am
by Research Team • Apex Research

Market Review & Outlook

Malaysia Market Review: The FBM KLCI (-0.22%) extended its decline, weighed down by sharp decline in YTL and YTLP after the both entities announced non-tradeable warrants, raising concerns about potential dilution. Weak sentiment persisted among lower liners amid negative market breadth with foreign funds remain net selling position. The Utilities (-2.67%) and Construction (-2.02%) sectors led the losses, while Telecom (+0.46%) emerged as the top gainer.

 

Global Markets Review: US markets reversed on last Friday, with all three major indices closing lower as investors braced for a slew of economic data and the upcoming Federal Reserve interest rate decision this week. European markets also closed slightly lower but managed to end the week with gains. Meanwhile, Asian stock markets closed mostly higher, tracking the previous day’s US performance after the US President called for lower interest rates and reduced oil prices.

 

Market Outlook: The FBM KLCI and the broader local bourse continued to face lingering negativity as external risks persisted. We expect cautious and defensive trading to dominate today, with limited excitement ahead of the mid-week Chinese New Year break and key US economic data releases. Trading activities is expected to turn lacklustre as investors may opt to turn towards the sidelines as market participants retreated ahead of the mid-week festive break. On the economic front, investors will closely monitor the upcoming US Federal Reserve meeting and interest rate decision, as well as the release of US GDP and PCE inflation data later this week as well as China’s economic data later today.

 

Sector focus. Defensive sectors such as REITs and Financials are recommended as focal points at this juncture, given persistent external risks and the impending local bourse break. Meanwhile, the Utilities and Construction sectors may continue to face selling pressure, weighed down by declines in YTL and YTLP, as well as ongoing concerns surrounding restrictions on AI chip imports.

 

FBMKLCI Technical Outlook

Technical Commentary: The FBM KLCI formed another bearish candle as the key index head towards the lower Bollinger Band. 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 has received valid acceptances of 1.548 billion shares or 92.82% of the total number of issued shares in Malaysia Airports Holdings Bhd on its conditional voluntary offer for shares of the airport operator.

 

A joint venture between Gamuda Bhd and Ferrovial (GFJV) has inked an early contractor involvement (ECI) agreement with Capricornia Energy Hub (CEH) for a hydroelectric storage project in Queensland, Australia.

 

Malaysian Resources Corp Bhd is partnering with Melaka Corp to develop a hospital on a parcel of land in Melaka Tengah that will have an estimated gross development cost of RM520 million.

 

Scientex Bhd is acquiring 528.49 acres of land in Paya Rumput, Melaka for RM333.8 million cash (RM14.50 per sq ft) from Genting Plantations Bhd.

 

TMC Life Sciences Bhd warned that it expects to report a loss for the second quarter ended Dec 31, 2024 (2QFY2025), compared to the net profit recorded in the same period last year.

 

Axis Real Estate Investment Trust said it will continue to aggressively source potential acquisition targets, particularly industrial properties.

 

AmanahRaya Real Estate Investment Trust has terminated its plan to sell the Contraves building in Cyberjaya due to a failed condition precedent, but is simultaneously pursuing the acquisition of a sustainable asset to boost its distribution per unit (DPU). 

 

Taghill Holdings Bhd has secured a RM152 million construction job in Kuantan, Pahang. 

 

Chin Hin Group Bhd has proposed to acquire an additional 37.38 million shares or a 12.27% stake in metal roofing and safety glass maker Ajiya Bhd for RM54.2 million or RM1.45 per share. 

 

TCS Group Holdings Bhd saw the emergence of a new substantial shareholder. James Liew Vun Tak acquired an 11.9% stake, equivalent to 71.5 million shares, through a direct business transaction on Friday. 

 

Sentiment: Negative
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