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Signs of Profit Taking
Wed, 16-Apr-2025 06:52 am
by Research Team • Apex Research

Malaysia Market Review: KLCI closed higher (+0.3%) on Tuesday, driven by positive global sentiment and expectations of a tariff reprieve from the US. Financials, Utilities, and Healthcare sectors led the gains, with Maybank (+0.3%), Tenaga (+0.15%), and IHH Healthcare (+0.6%) as top performers. On the other hand, the Healthcare sector was the biggest laggard on profit taking in gloves companies.

 

Global Markets Review: Major indices on Wall Street closed lower amid ongoing tariff uncertainty as investors digest on-going release of earnings reports. In contrast, European shares closed higher, with the STOXX 600 up 1.6%, driven by positive tariff developments that President Trump's hint on amendments to the 25% auto import tariffs. Most Asia-Pacific markets closed positively, on optimism over tariff exemptions and strong bank earnings. In China, sentiment was mixed, with the Shanghai CSI 300 and Shanghai Composite down 0.3%, while Hang Seng remained flat as gains were capped by uncertainty over additional levies and a brewing trade war. Japan’s Nikkei 225 rose 1.3% and South Korea’s KOSPI gained 1.0%, driven by strong performances in tech and auto stocks.

 

Market Outlook: FBM KLCI is showing signs of recovery, with bearish momentum easing and sentiment improving. While indications that President Trump may soften his tariff stance could boost market sentiment, uncertainty remains regarding whether further other tariffs will be imposed after the 90-day pause. As such, we expect the market to remain volatile, with the index likely to trade within the 1,470-1,490 range today. The ongoing US corporate earnings reports are likely to have a more substantial impact on investor sentiment in the weeks to come. The arrival of China’s President Xi Jinping is expected to strengthen bilaterial ties between Malaysia and China which may offer stronger FDI over the foreseeable future.

 

Sector focus. Volatility remains due to uncertainty surrounding the impact of Trump’s tariffs on the economy. We advise a defensive stance in the near term, focusing on sectors like REITs, Utilities, and Financials, which offer solid dividend yields and act as safe havens during periods of volatility.

 

Technical Commentary: The FBM KLCI inched higher for the third straight session as the key index approaches the 1,500 psychological level. Indicators turned mixed with the MACD Line hooked above the Signal Line, while the RSI is approaching 50. Short-term consolidation may take precedence after a volatile week. Immediate resistance is located at 1,500. Support is envisaged around 1,420.

 

Tenaga Nasional Bhd (TNB), via its wholly owned subsidiary TNB Repair and Maintenance Sdn Bhd (TNB Remaco), has secured a RM705mil contract from the Kuwait Ministry of Electricity, Water and Renewable Energy for maintenance works at the Sabiya Power Generation and Water Distillation Plant in Kuwait.

 

Petronas Gas Bhd expects gas supply restoration in Putra Heights by July 1, pending approvals and progress.

 

RHB Bank Bhd confirmed its involvement in a RM313.1m lawsuit over the sale of a luxury condominium, alleging breach of duty of care.

 

Lien Hoe Corp Bhd raised going concern issues after reporting a RM8.6m loss, but auditors issued an unmodified opinion.

 

Mayu Global Group Bhd had RM10.7m in bank accounts frozen in a money laundering investigation. Executive director was released without charges.

 

Binastra Corp Bhd secured RM458.5m in contracts for serviced apartments in Johor Bahru.

 

Tomei Consolidated Bhd proposed a 2.5 sen final dividend for FY24, bringing total payout to 4 sen/share.

 

Binasat Communications Bhd lost a RM13.2m civil works contract for a Kuala Lumpur substation project.

 

Aurelius Technologies Bhd plans a two-for-one bonus share issue and one-for-one warrants, totaling 867.5m shares and 433.7m warrants.

 

Kerjaya Prospek Group Bhd won a RM98.1m contract for a project at Bandar Tanjung Pinang, Andaman Island.

 

Scope Industries Bhd is selling Scope Manufacturers to Luxshare Precision for RM96.7m to focus on plantation business.

 

Keyfield International Bhd acquired a US$20.6m (RM90.8m) cable-laying barge, which will be chartered for offshore wind farm projects.

Sentiment: Positive
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