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Mon, 03-Mar-2025 06:33 am
by Research Team • Apex Research

Market Review & Outlook

Malaysia Market Review: FBM KLCI (-0.75%) turned bearish on last Friday with 24 index components closed in red as the key index bucked the mostly positive regional trend. The lower liners were also negative across the board except for Telco (+0.92%) and Plantation (+0.37%) sectors, while Technology sector (-5.87%) was the worst performer.

 

Global Markets Review: Wall Street soared as all three major indices rallied sharply on last Friday, driven by bargain-hunting activities following Ukraine’s President, Zelenskyy’s visit to the US. Meanwhile, European markets ended mixed on Friday, reacting to the spillover effects of Thursday’s sell-off in chipmaking giant Nvidia. In contrast, Asia-Pacific markets declined, weighed down by US President Donald Trump’s confirmation that tariffs on imports from Mexico and Canada will take effect this week.

 

Market Outlook: We expect trading sentiment on the FBM KLCI to remain weak at the moment after failing to hold on to near-term support at 1,580. The market remains highly news-driven, and any signs of escalation or lack of resolution in the Russia-Ukraine conflict, along with the threat of new tariffs, are likely to heighten market volatility. The lower liners may attempt to find stability following the recent pullback with investors bargain hunting for beaten down stocks. With quarterly earnings season coming to an end, focus now shifts to regional economic data, including EU inflation rate, S&P Global Manufacturing PMI, and US Construction Spending, all set for release today. Meanwhile, the decline in US consumer spending for the first time in nearly two years in Jan 2025 reignite hopes that inflation may taper. 

 

Sector focus. We advocate investors to adopt a defensive stance amid ongoing market uncertainty, with safe-haven assets like gold potentially attracting interest following the recent pullback. Meanwhile, we expect active trading in the plantation sector, supported by stronger-than-expected quarterly results and a rebound in CPO prices, which have regained momentum over the past week. Also, the strong EPF dividend at 6.3% (both conventional and shariah) – the highest in seven years may provide some boost to the consumer sector.

 

FBMKLCI Technical Outlook

Technical Commentary: The FBM KLCI gapped down and formed a bearish candle as the key index drifted further from the SMA50 level. Indicators were mixed with the MACD Line lingering above the Signal Line, but the RSI treaded below 50. Immediate resistance is located at 1,600. Support is envisaged around 1,550.

 

Company News (source: various)

CIMB Group Holdings Bhd’s net profit for the fourth quarter ended Dec 31, 2024 (4QFY2024) grew nearly 5% to RM1.8 billion from RM1.72 billion a year ago, lifting its full-year net profit to a record high of RM7.73 billion.

 

Tenaga Nasional Bhd said a reversal on impairment in receivables and financial instruments lifted its net profit by 64% to RM954.5 million in 4QFY2024 from RM583.9 million a year ago.

 

Allianz Malaysia Bhd’s net profit rose 19.1% y-o-y to RM230.71 million in 4QFY2024, up from RM193.69 million, on higher net insurance and investment results from its investment-linked protection business, partially offset by lower contributions from employee benefits business.

 

PPB Group Bhd’s net profit fell 17.3% to RM365.20 million in 4QFY2024 from RM441.40 million a year ago, dragged by lower contributions from its 18.8%-owned associate Wilmar International Ltd, despite a strong performance by the group's core business segments.

 

Hospital operator KPJ Healthcare Bhd’s net profit surged 64% to RM120.52 million in 4QFY2024 from RM73.39 million a year ago, as revenue growth from higher patient visits and bed capacity outpaced increases in costs and expenses.

 

Pharmaniaga Bhd is banking on newly-approved products for growth in 2025 after turning around in the final quarter of 2024 on higher sales and absence of impairments.

 

Capital A Bhd ended the final quarter of 2024 with a bigger net loss of RM1.57 billion versus losses of RM345.31 million a year earlier, dragged by foreign exchange (forex) losses, despite registering higher revenue from its continuing operations.

 

AirAsia X Bhd reported a 17.6% decline in net profit to RM22.56 million for 4QFY2024, from RM27.37 million a year earlier, as forex losses weighed on its bottom line.

 

Batu Kawan Bhd’s net profit rose 14.2% to RM127.6 million for the first quarter ended Dec 31, 2024 (1QFY2025), from RM111.74 million last year, driven by higher selling prices of palm products, sales volume as well as a paper gain.

 

S P Setia Bhd’s 4QFY2024 net profit dropped 30% y-o-y to RM103.57 million from RM148.24 million last year, due to lower contributions from its Australian project and higher interest costs.

 

Tropicana Corp Bhd returned to profitability in 4QFY2024 as revenue surged 41.1% y-o-y to RM520.9 million, driven by higher progress billings and land disposals.

 

FGV Holdings Bhd posted a 65% y-o-y rise in net profit for the fourth quarter to RM116.21 million, from RM70.44 million, on higher fresh fruit bunch prices as well as its sugar division’s higher capacity utilisation.

 

Farm Fresh Bhd's net profit rose 26.5% to RM25.86 million in the third quarter ended Dec 31, 2024 (3QFY2025) from RM20.44 million last year, driven by higher sales of premium-margin products, partially offset by increased administrative costs due to an expansion of Inside Scoop outlets.

 

Unisem (M) Bhd’s net profit plunged 69.4% to RM8.7 million in 4QFY2024 from RM28.44 million a year earlier, as higher operating costs and weaker margins from changes in its product mix weighed on earnings.

 

PIE Industrial Bhd’s 4QFY2024 net profit fell 38.2% y-o-y to RM17.29 million from RM27.97 million, owing to weaker demand for its electronics manufacturing services (EMS), coupled with higher administrative and distribution expenses.

 

Cape EMS Bhd posted its second straight quarterly net loss of RM48.84 million for 4QFY2024, hurt by weaker demand, allowance for expected credit loss and reduced gross profit margin.

 

Inta Bina Group Bhd has secured a RM181 million contract to undertake the construction of a mixed commercial development project in Kuala Langat, Selangor. 

Sentiment: Negative
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