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Remained cautious - Market Review & Outlook
Fri, 21-Feb-2025 07:24 am
by Research Team • Apex Research

Market Review & Outlook

Malaysia Market Review: FBM KLCI (-0.2%) ended lower for the second consecutive day as investors sentiment remained cautious over US tariff concerns. Sector performance was split, with Property (+0.2%) and Technology (+0.1%) indices being notable gainers, while Telco (-2.0%) and Energy (-0.7%) showed a sharp decline.

 

Global Markets Review: US stocks retreated on Thursday following two days of record highs. Dow (-1.0%), S&P 500 (-0.4%), and Nasdaq (-0.5%) all ended lower, as investors reacted to Walmart’s weaker-than-expected sales guidance. Asian markets mostly closed lower, with Chinese technology stocks underperforming after a short-term rally. The Shanghai Composite slipped 0.02%, and the Hang Seng fell 1.6%, extending the previous session's decline. Japan's Nikkei ended at a two-week low, down 1.2%, as investors assessed the potential impact of US President Donald Trump’s latest tariff threat. The South Korean KOSPI also closed lower by 0.7%, following its highest point since late Sept 2024, with traders cautious due to the tariff concerns.

 

Market Outlook: FBM KLCI is expected to remain under pressure, underpinned by persistent foreign fund outflows and fragile sentiment. Following the weaker performance on Wall Street, we anticipate that negative sentiment may spill over to the local bourse, potentially leading to an extended pullback. For today, we expect the index to trade within a range of 1,580 to 1,590. Nevertheless, we believe this trend to be temporary, given that Malaysian stocks remain reasonably valued which may eventually attract bargain hunting activities.

 

Sector focus. Investors are advised to focus on defensive sectors such as REITs and financials, which offer attractive dividend yields and serve as defensive plays against market volatility. We also favour the RE sector, supported by the rollout of new projects and ongoing initiatives to drive the nation’s green transition.

 

FBMKLCI Technical Outlook

Technical Commentary: The FBM KLCI formed a hammer candle as the key index managed to recoup most of its intraday losses. The downward bias momentum may extend overtime. Indicators remained mixed with the MACD Line lingering above the Signal Line, while the RSI tripped below 50. Immediate resistance is located at 1,630. Support is envisaged around 1,570.

 

Company News (source: various)

YTL Power International Bhd experienced a 9.16% decline in net profit to RM767.69m for 2QFY2025, mainly due to reduced contributions from its power generation division.

 

YTL Corp Bhd saw a slight 1.56% decrease in net profit to RM580.01m for 2QFY2025, primarily due to lower earnings from its utilities business.

 

AMMB Holdings Bhd posted a 10.48% drop in net profit to RM486.49m for 3QFY2025, impacted by higher operating expenses and a reduction in Islamic banking income.

 

Petronas Dagangan Bhd declared a special dividend of 20 sen per share after reporting a 37.8% increase in 4QFY2024 net profit, which rose to RM249.06m.

 

Sunway Construction Group Bhd achieved a 40.4% yoy increase in 4QFY2024 net profit to RM69.17m, supported by strong revenue growth of 60.7% to RM1.4bn. This strong performance contributed to the highest dividend payout in the company’s history, with a total dividend of 8.5 sen per share for FY2024.

 

Malayan Cement Bhd reported a 52.4% surge in net profit to RM184.68m for 2QFY2025, driven by lower costs and higher other operating income, although revenue remained flat at RM1.15bn. The company declared an interim dividend of five sen per share for the quarter.

 

Kossan Rubber Industries Bhd posted a significant jump in net profit to RM27.7m in 4QFY2024, compared to just RM806,000 a year ago, primarily due to the absence of a one-off impairment in 4QFY2023.

 

PMB Technology Bhd recorded a 54.3% increase in 4QFY2024 net profit to RM48.23m, mainly due to a one-off gain from land disposal. 

 

Dayang Enterprise Holdings Bhd faced an 82.1% drop in net profit to RM16.81m for 4QFY2024, impacted by forex losses and the absence of an impairment reversal, despite recording a record high net profit for the full year at RM311.09m. The company declared a final dividend of seven sen per share.

 

Solarvest Holdings Bhd achieved a record net profit of RM14.37m in 3QFY2025, a 35% increase from the previous year, driven by progress in utility-scale solar projects. Despite the strong quarterly performance, the company's 9MFY2025 revenue dropped by 21.2% to RM311.95m, but net profit reached a record high of RM31.41m.

 

Berjaya Food Bhd reported a net loss of RM35.33m for 2QFY2025, a narrower loss compared to RM42.58m in the same period last year, as the Starbucks operator faced challenges from declining revenue, which fell by 33% to RM123.1m.

 

UEM Sunrise Bhd saw its net profit nearly double to RM54.33m for 4QFY2024, supported by share of profits from joint ventures and associates. The company declared an interim dividend of 1.24 sen per share.

 

Lysaght Galvanized Steel Bhd achieved a net profit of RM12.69m for FY2024, an increase of 12.8% compared to the previous year. The company declared a final dividend of seven sen per share.

Sentiment: Negative
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