Opening Daily Highlight
Mixed
Rebound Challenged by Middle East Tensions
Mon, 17-Mar-2025 07:30 am
by Research Team • Apex Research

Market Review & Outlook

Malaysia Market Review: The FBM KLCI extended its rebound from the previous session, inching up 0.1% on last Friday despite a sharp overnight sell-off on Wall Street. Lower liners also followed suit. Sector-wise, gains were led by Construction (+2.5%), Technology (+2.0%), and Energy (+1.9%), while Telecommunication and Media (-0.5%) and REITs (-0.4%) were the main laggards.

 

Global Markets Review: Wall Street staged a strong rebound after Thursday’s steep losses, as concerns over a US government shutdown eased following reports that lawmakers were likely to approve a funding plan. The relief rally saw all three major indices closing higher, with the S&P 500 (+2.1%) and Nasdaq (+2.6%) recording their best performance since the November election. In Europe, markets closed higher as optimism grew after German political parties reached a historic debt agreement. Chancellor-in-waiting Friedrich Merz reportedly secured a deal with the Greens on a massive increase in state borrowing. Meanwhile, Asian markets ended mostly higher on Friday, led by gains in China. 

 

Market Outlook: As tariff concerns and trade tensions persist, we anticipate heightened volatility in the market. However, bargain-hunting is likely to continue in the local bourse, building on gains in the past two sessions. That said, further upside could be capped by geopolitical risk in the Middle East following US President Donald Trump’s order for airstrikes on Houthi-controlled areas in Yemen on Saturday, alongside continued foreign fund outflows. Under the prevailing uncertainties, we recommend that investors adopt a more defensive stance in the near term. Looking ahead, market attention will be on the Federal Reserve and BOJ, with both central banks expected to maintain interest rates unchanged on Wednesday. Additionally, Nvidia’s GPU Tech Conference (GTC) will take place this week, which could drive interest in the Technology sector.

 

Sector focus. We continue to favour defensive sectors, such as REITs, Healthcare and Utilities, which may provide stability amid market uncertainties. Technology sector could remain in focus today, tracking Nasdaq’s strong overnight gains on Friday, along with potential catalysts from Nvidia’s GTC event this week. Meanwhile, Energy stock may attract renewed interest as escalating tensions in the Middle East raise concerns over potential supply disruptions.

 

FBMKLCI Technical Outlook

Technical Commentary: The FBM KLCI formed another bullish candle after recovering all its intraday losses as the key index defended the 1,500 psychological level. Indicators, however, remained negative with the MACD Line lingered below the Signal Line, while the RSI hovers below 50. Immediate resistance is located at 1,570. Support is envisaged around 1,500.

 

Company News (source: various)

Government e-services provider Pertama Digital Bhd plans to acquire an 80% stake in D-Ron Singapore and D-Ron Malaysia for RM106.12 million as part of its regularisation plan after missing Bursa Malaysia’s submission deadline of Feb 9, 2025. 

 

Prawn farming company MAG Holdings Bhd has proposed to acquire farmland and other assets in Tawau, Sabah, for RM39.6 million through related-party transactions.

 

Khazanah Nasional Bhd will acquire Innovation Network Corporation of Japan’s (INCJ) 21% stake in Edotco Group for an undisclosed amount, increasing its shareholding to nearly 32%. Edotco, controlled by Axiata Group Bhd with a 63% stake, also has Kumpulan Wang Persaraan (Diperbadankan) as a 5% shareholder.

 

KJTS Group Bhd has entered into a joint venture (JV) with Stonepeak Kelvin Holdings Ltd, an affiliate of New York-based investment firm Stonepeak Partners LP, to develop, operate, and invest in cooling assets.

 

Catcha Digital Bhd has made its fourth acquisition in nearly four months, acquiring a 60% stake in digital media advertising firm Framemotion Studio Sdn Bhd (FMS) for RM37.32 million in cash. 

 

Khazanah Nasional Bhd-backed TT Vision Holdings Bhd stated it is unaware of any reason for the sharp rise in its share price and trading volume after Bursa Malaysia issued an unusual market activity (UMA) query on Friday. 

 

HHRG Bhd’s largest substantial shareholders, Ch’ng Chen Mong and Tan Poh Cheng, have fully exited the company after selling their entire 17.77% stake in the Penang-based biomass material manufacturer.

Sentiment: Positive
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