Opening Daily Highlight
Mixed
Market Remains Cautious
Wed, 28-May-2025 06:32 am
by Research Team • Apex Research

Market Review & Outlook

Malaysia Market Review: The FBM KLCI closed slightly lower at 1,526.2, down 8.1 points (-0.5%), weighed down by cautious trading amid global economic uncertainties. Among heavyweight stocks, Maybank, Public Bank, CIMB, and IHH Healthcare edged down, while Tenaga Nasional remained flat. Sector-wise, financial services declined 0.7%, energy and industrial sectors eased slightly by 1.0% and 0.2% respectively, while plantation gained 0.6%, supported by stronger commodity prices.

 

Global Markets Review:  US markets resume trading on a buoyant manner as the Dow rose 1.8%, S&P 500 gained 2.1%, and Nasdaq jumped 2.5%, supported by improved consumer confidence and signs of progress in trade negotiations. European STOXX 600 indices rose 0.3% primarily due to investors gained optimism that the threatened 50% U.S. tariffs on the European Union would likely be averted through ongoing trade negotiations. Asian markets were mixed Tuesday amid cautious investor sentiment over ongoing global trade uncertainties. Japan’s Nikkei 225 edged up 0.5% as investors awaited further clarity on US-EU tariff negotiations. Meanwhile, South Korea’s Kospi slipped 0.3% due to tech profit-taking, and Hong Kong’s Hang Seng fell 0.4%, weighed down by weaker retail sales.

 

Market Outlook: We expect the FBM KLCI to remain in a consolidation phase, weighed down by ongoing cautious sentiment and global uncertainties. This comes despite the US potentially lowering its proposed tariffs on Malaysian exports to a baseline of 10%, a positive development that has yet to significantly boost market sentiment. Foreign funds are likely to continue as net sellers amid a lack of clear catalysts for a sustained recovery. Meanwhile, investors are advised to watch the upcoming US FOMC minutes for further guidance on the direction of interest rates.

 

Sector focus. Amid ongoing uncertainty, investors are advised to take a selective approach by focusing on sectors with robust fundamentals, including financials, consumer staples, and utilities.

 

FBMKLCI Technical Outlook

Technical Commentary: The FBM KLCI formed another bearish candle as the key index drifted closer towards SMA50. Indicators remained negative with the MACD Line lingered below the Signal Line, while the RSI hovered below 50. An extended pullback remains on the cards. Technically, the immediate resistance is located at 1,550, followed by 1,600. Support is envisaged around 1,500.

 

Company News (source: various)

Tenaga Nasional Berhad net profit for 1QFY2025 rose nearly 48% to RM1.1bn, driven by foreign exchange gains and lower operating expenses despite higher tax expenses. Revenue grew 17.6% to RM16.0bn, supported by a 17.5% increase in electricity sales due to regulatory adjustments under the incentive-based regulation framework. No dividend was declared.

 

IOI Corporation Berhad net profit for 3QFY2025 more than doubled to RM262.3m due to higher palm product prices. Revenue increased 11.1% to RM2.7bn. No dividend was declared.

 

Sime Darby Berhad expects weaker core financial performance in FY2025 after a 43.3% decline in 3QFY2025 net profit to RM193.0m, with revenue down 13.3% to RM16.3bn. Global economic uncertainty and market volatility affected its industrial and motors divisions. No dividend was declared.

 

Alliance Bank Malaysia Berhad 4QFY2025 net profit rose 11.0% to RM197.5m, supported by higher net interest income and lower provisions. Full FY2025 net profit hit a record RM750.7m, with revenue up 12.3%. Proposed second interim dividend was 9.9sen/share, totaling 19.4sen/share with a 40% payout ratio.

 

Malakoff Corporation Berhad 1QFY2025 net profit fell 45.4% to RM34.0m due to lower energy payments. Revenue dropped 11.1% to RM2.0bn. No dividend was declared.

 

IGB Berhad 1QFY2025 net profit declined 51.9% to RM89.1m, mainly due to absence of a one-off RM108.7m land sale gain recorded last year. Revenue rose 19.9% to RM499.4m. No dividend was declared.

 

Hap Seng Plantations Holdings Berhad 1QFY2025 net profit dropped 38.4% to RM22.5m due to a RM16.7m fair value loss on biological assets. Revenue rose 12.9% to RM179.4m, helped by higher palm product prices offsetting lower sales volume. No dividend was declared.

 

UEM Edgenta Berhad slipped into a net loss of RM18.0m in 1QFY2025, reversing from a RM9.8m net profit a year earlier. Revenue declined 4.7% to RM646.1m due to weaker infrastructure and healthcare contributions. No dividend was declared.

 

MN Holdings Berhad tripled its 3QFY2025 net profit to RM16.7m, its highest quarterly profit, with revenue more than doubling to RM127.4m. The company secured a RM52.5m data centre contract and declared a second interim dividend of 10sen/share.

 

MNRB Holdings Berhad 4QFY2025 net profit fell 60.7% to RM93.4m, affected by lower insurance revenue, paper losses, and weaker associates’ results. Revenue declined 11.2% to RM921.9m. No dividend was declared.

 

Nextgreen Global Berhad recorded a 135% jump in 1QFY2025 net profit to RM7.1m due to higher gross margins from liquid fertiliser production. Revenue grew 5.7% to RM14.1m. No dividend was declared.

 

Sentral REIT announced acquisition of 38 retail units and 1,432 parking bays in Arcoris Plaza, Mont Kiara, from UEM Sunrise for RM70.0m, aiming for operational synergies and flexible tenant mix.

 

Shin Yang Group Berhad subsidiary Shin Yang Shipyard received a non-binding letter of intent from Ministry of Home Affairs to build two offshore patrol vessels for Malaysian Maritime Enforcement Agency. Project could boost earnings if finalized.

Sentiment: Negative
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