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Tariff Pause Offers Market Respite
Tue, 04-Feb-2025 07:11 am
by Research Team • Apex Research

Market Review & Outlook

Malaysia Market Review: The FBM KLCI ended lower on the first trading day of February, bogged down by heightened risk aversion following the announcement of new tariffs by the US administration under president Donald Trump. The benchmark index closed 0.2% lower, weighed down by losses in Petronas Chemicals, Sime Darby and YTL Power. Similarly, lower liners retreated. Sector-wise, Healthcare (+2.5%) and Construction (+1.0%) led the gains, while Industrial Products and Services (-1.0%) and Energy (-0.9%) were the top laggards.

 

Global Markets Review: Wall Street staged a strong rebound from early steep losses on Monday after US President Donald Trump said tariffs against Mexico would be paused for a month. Despite the recovery, the Dow ended 0.3% lower, S&P 500 slid 0.8%, and the Nasdaq slumped 1.2%. In Europe, stocks traded lower after Trump threatened to impose tariffs on the European Union and the UK. Similarly, Asian markets tumbled on fears of an escalating global trade war. Japan’s Nikkei plunged 2.7%, South Korea’s Kospi dropped 2.5%, while Hong Kong’s Hang Seng closed flat. Chinese markets remained closed for the Lunar New Year holiday.

 

Market Outlook: We expect the local bourse to consolidate and trade range-bound this week amid lack of fresh catalysts along with the unabated selling pressure from foreign funds. Global sentiment remains fragile due to fears of an escalating global trade war. However, market may find some respite today following the 30-day pause on tariffs for Mexico and Canada. With volatility expected to escalate, investors may adopt a cautious stance and remain on the sidelines. For the week ahead, market attention will be focused on the PMI data from the US, Europe, and China, followed by the US jobs report on Friday.

 

Sector focus. The Utilities and Construction sectors may continue to attract bargain hunting activities after the sharp sell-off before the festive break. Meanwhile, hospital operators and REITs could see renewed buying interest as investors shift toward defensive counters amid heightened market volatility. 

 

FBMKLCI Technical Outlook

Technical Commentary: The FBM KLCI formed a gapped down before recovering most of its intraday losses yesterday. Indicators remained negative as MACD Line lingered below the Signal Line, while the RSI is approaching the oversold territory. Immediate resistance is located at 1,600. Support is envisaged around 1,530.

 

Company News (source: various)

Fraser & Neave Holdings Bhd’s net profit for the first quarter ended Dec 31, 2024 (1QFY2025) fell marginally to RM169 million from RM170.74 million a year ago, dragged by higher tax expense, which nearly doubled to RM70.1 million from RM35.33 million.

 

Sunway Real Estate Investment Trust’s net property income (NPI) for the fourth quarter ended Dec 31, 2024 (4QFY2024) increased by 22% to RM165.55 million, from RM135.66 million in the same quarter a year earlier, driven by nine newly acquired properties. 

 

SD Guthrie Bhd’s downstream arm SD Guthrie International Ltd has acquired a 48% equity interest in Netherlands-based Marvesa Supply Chain Services BV for €54 million (RM250 million) from Dutch private equity firm, Parcom.

 

Mulpha International Bhd, which in recent years has slimmed down its property portfolio in Malaysia to focus on its activities in Australia, has disposed of a shopping centre along with its associated marina in Queensland, Australia.

 

Prolintas Infra Business Trust said Datuk Mohammad Azlan Abdullah has relinquished his role as non-independent and non-executive director from its trustee-manager, Prolintas Managers Sdn Bhd. 

 

Steel Hawk Bhd’s wholly owned unit Steel Hawk Engineering Sdn Bhd has secured a one-year contract extension from Petronas Carigali Sdn Bhd for the provision of onshore facilities maintenance, construction and modification services.

 

MMAG Holdings Bhd has appointed Ahmad Luqman Mohd Azmi, the former CEO of Malaysia Aviation Group’s (MAG) airlines business, as an executive director effective immediately. 

 

Wisma Majujaya Sdn Bhd has obtained a summary judgement from the High Court over its RM28.1 million suit filed against Bina Puri Holdings Bhd, its subsidiary Bina Puri Properties Sdn Bhd, and its director Tan Sri Tee Hock Seng. 

 

KJTS Group Bhd is to acquire the entire equity stake in Malakoff Corp Bhd’s energy-efficient cooling unit Malakoff Utilities Sdn Bhd for RM65.5 million in cash.

 

Ahmad Zaki Resources Bhd’s wholly owned unit Ahmad Zaki Sdn Bhd has secured a RM63.44 million contract from the Public Works Department to undertake the construction of a bridge at Kampung Binjai in Kuala Lipis, Pahang.

 

Salutica Bhd has filed an appeal against the High Court’s decision to dismiss its patent infringement suit against Apple Malaysia Sdn Bhd. 

 

Cahya Mata Sarawak Bhd’s wholly owned unit Cahya Mata Intelligent Technologies Sdn Bhd (Cahya Mata IT) has initiated arbitration proceedings against Vienna Advantage GmbH over a contract dispute.

 

KGW Group Bhd said US-based logistics firm Accelerated Global Solutions Inc (AGS) has acquired a 15% stake in the company.

 

Maxland Bhd has inked another 60-year land lease agreement with Kulim Technology Park Corp Sdn Bhd, but this time for land to venture into the district cooling system business.

Sentiment: Negative
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