Opening Daily Highlight
Mixed
Await Clearer Catalysts
Thu, 29-May-2025 06:36 am
by Research Team • Apex Research

Market Review & Outlook

Malaysia Market Review: FBM KLCI closed lower at 1,523.5, down 2.7 points (-0.2%), pressured by profit-taking following weak earnings from Sime Darby. Among heavyweight stocks, Maybank, Public Bank, CIMB, and Sime Darby declined, while Tenaga Nasional and IHH Healthcare recorded modest gains. Sector-wise, financial services slipped 0.5%, plantation fell 1.1%, energy rose 1.1%, and industrials eased 0.2%.

 

Global Markets Review:  Wall Street closed lower on Wednesday, with the Dow falling 0.6%, the S&P 500 declining 0.5%, and the Nasdaq slipping 0.5%, as investors awaited Nvidia’s earnings report amid ongoing tariff uncertainties. European STOXX 600 indices rose 0.1%, supported by cautious optimism as investors awaited key economic data releases, including German import prices and French GDP figures. Asian markets were mostly positive, buoyed by strong US consumer confidence and progress in US-EU trade talks. Japan’s Nikkei 225 rose 0.3%, supported by steady investor demand ahead of key economic data. South Korea’s Kospi advanced 1.3%, led by gains in technology stocks, while Hong Kong’s Hang Seng dipped 0.4%, pressured by weaker retail sales.

 

Market Outlook: We expect the FBM KLCI to trade on a downward bias tone as cautiousness persists amid ongoing geopolitical uncertainties. The latest Fed minutes meeting which highlights concerned about the economic impact of tariffs is expected to continue to sap sentiment. Any recovery attempts may be restrained by short-term profit-taking and sustained foreign fund outflows. Foreign investors are likely to remain cautious until more definitive signs of a market rebound appear. Meanwhile, the corporate earnings season is set to take center stage, potentially injecting fresh momentum and providing clearer direction for the market. Investors will be keeping a close watch onto the second reading of US Q1 2025 GDP later tonight.

 

Sector focus. We advocate investors to adopt a defensive stance amid ongoing market uncertainty, focusing on blue-chip stocks with strong fundamentals, such as those in the financial, consumer staples, and utilities sectors.

 

FBMKLCI Technical Outlook

Technical Commentary: The FBM KLCI extended its decline for the third consecutive session as the key index looks to re-test the SMA50 level. Indicators remained negative with the MACD Line lingered below the Signal Line, while the RSI hovered below 50. An extended pullback remains to be seen. Technically, the immediate resistance is located at 1,550, followed by 1,600. Support is envisaged around 1,500.

 

Company News (source: various)

RHB Bank Berhad reported a 2.7% net profit growth to RM750m in 1QFY2025, driven by higher net interest income and lower provisions, despite a 20% drop in non-interest income.

 

Hong Leong Bank Berhad saw a 9.4% net profit decline to RM947m in 3QFY2025, mainly due to dilution losses and lower associate earnings, offsetting strong revenue growth.

 

Axiata Group Berhad more than doubled its 1Q net profit to RM160m, supported by lower depreciations and higher share of results from CelcomDigi Berhad, despite an 11% revenue decline.

 

MISC Berhad reported a 7% profit drop to RM706m in 1QFY2025, driven by weaker contributions across segments, but declared an eight sen interim dividend.

 

IOI Properties Group Berhad net profit halved to RM76m in 3QFY2025, pressured by higher interest expenses despite improved property and hospitality performance.

 

Telekom Malaysia Berhad posted a 5.5% profit decline to RM401m in 1QFY2025 due to 5G and device costs, with revenue nearly flat.

 

Genting Plantations Berhad, in which Genting Berhad owns a 55.4% stake, grew net profit 43% to RM61m in 1QFY2025, benefiting from higher palm prices and strong downstream sales.

 

Kerjaya Prospek Group Berhad saw a 37% net profit jump to RM46m in 1QFY2025 on stronger construction progress, declaring a three sen dividend.

 

Sime Darby Property Berhad net profit dipped 4.2% to RM118m in 1QFY2025 amid higher taxes and eliminations despite stronger asset management revenue.

 

7-Eleven Malaysia Holdings Berhad net profit fell 17% to RM10.6m in 1QFY2025, impacted by expansion costs, though revenue rose 10%.

 

AirAsia X Berhad net profit dropped 37% to RM50m in 1QFY2025 due to higher operating expenses, despite a 3.4% revenue increase.

 

Pestech International Berhad secured a RM270m contract for Phase 2 of the Klang Valley electric double track railway project, with completion expected by January 2029.

 

Jati Tinggi Group Berhad won a RM161m contract from Tenaga Nasional Berhad to establish a bulk supply connection for a Johor data centre, in a joint venture with Idiqa Holding Sdn Bhd. 

Sentiment: Negative
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