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Rebound Ahead as Tariff Fears Subside
Tue, 03-Jun-2025 07:33 am
by Research Team • Apex Research

Market Review & Outlook

Malaysia Market Review: FBM KLCI closed lower at 1,505.35 (-0.7%), pressured by profit-taking as foreign investors continued to trim their holdings, bogged by tariff concerns and weak regional markets. Among key stocks, HLFG and Bintulu Port posted modest gains, while Nestle and Ajinamoto declined. Sector-wise, 3 out of 13 sectors showed modest gains, with transportation gaining 0.8%, REIT edging up 0.1%, and construction up 0.01%. The largest declining sectors were telco & media, with a 2.5% decline, and consumer sectors, down 1.6%.

 

Global Markets Review:  Wall Street closed with modest gains on Monday, with the Dow up 0.08%, the S&P 500 rising 0.4%, and the Nasdaq gaining 0.7%, driven by strong earnings from the energy sector and some Big Tech names like Meta and AMD. The European STOXX 600 down 0.1% impacted by Trump’s move to double tariffs on steel and aluminium imports to 50%. Asian markets showed a mixed performance as investors weighed recent U.S. trade developments. Japan's Nikkei 225 fell 1.3% due to concerns over shifting US tariff policies, while South Korea's Kospi edged up 0.05% on tech gains, despite losses for steelmakers and carmakers. Meanwhile, on Monday, renewed Sino-U.S. tariff tensions and broader trade disputes led to declines, with Hong Kong's Hang Seng dropping 0.5% and China's CSI 300 declining 0.4% (mainland markets were closed for the Dragon Boat Festival on Monday).

 

Market Outlook: We expect the FBM KLCI to remain volatile, as uncertainty surrounding renewed and escalating US trade protectionism remains in place following US plan to double steel import tariffs to 50% effective tomorrow. However, potential trade negotiations between US and China have resurfaced and that may provide some alleviation. The key index is likely to defend the psychological 1,510–1,520 level over the near term. Meanwhile, the conclusion of corporate earnings season across Bursa Malaysia could provide some respite towards earnings clarity. Investors will be keeping a close tab onto Malaysia manufacturing PMI as well as US factory orders later today.

 

Sector focus. We remain optimistic about the Technology and Power ancillary sectors, as bargain hunting is accelerating their recovery.

 

FBMKLCI Technical Outlook

Technical Commentary: The FBM KLCI formed another bearish candle for the fifth straight session as the key index slipped below SMA50. Indicators remained negative with the MACD Line lingered below the Signal Line, while the RSI hovered below 50. A potential consolidation may take place as the key index attempts to find stability. Technically, the immediate resistance is located at 1,550, followed by 1,600. Support is envisaged around 1,500.

 

Company News (source: various)

CIMB Group Holdings Bhd posted a 1.9% net profit rise to RM1.97bn in 1QFY25, driven by increased interest income and reduced provisions. While loan growth boosted interest income, non-interest income dipped due to lower non-performing loan sales and trading. No dividend was announced this quarter.

 

Mah Sing Group Bhd is seeking new partners for a data center project in Bangi after talks with Bridge Data Centres for a 100MW facility ended. However, their agreement for a separate 200MW data center project is still active. Meanwhile, Mah Sing's 1QFY25 net profit jumped nearly 10% to RM66m, with revenue up 16.4%, driven by strong property development contributions. 

 

RHB Bank Bhd appointed Nurjesmi (former CEO of Affin Hwang Investment Bank Bhd) as wholesale banking head.

 

Bank Islam Malaysia Bhd 1QFY25 net profit dropped over 3% to RM126m, largely due to an 89% surge in provisions for bad loans and higher overheads. No dividend was declared.

 

Capital A Bhd returned to profit in 1QFY25 with RM689m net proft, primarily due to an RM882m gain from its aviation business, now a discontinued operation pending sale to AirAsia X. Separately, Capital A and AirAsia X extended their aviation business restructuring deal deadline to 31st of July 2025, to finalise AirAsia X's RM1.0bn private placement and secure necessary approvals.

 

Yinson Holdings Bhd’s FY2025 net profit jumped 66.1% to RM1.25 bn after changing tax treatment for Netherlands offshore ops.

 

SKP Resources Bhd ended its FY2025 with a 30% increase in net profit.

 

Berjaya Corp Bhd reported a wider net loss of RM92.3m in 3QFY25, marking its fourth consecutive quarterly loss due to weaker food and property segments.

 

Bintulu Port Holdings Bhd 1QFY25 net profit fell 36% to RM28.4m due to lower activity, but the Group still declared a three sen dividend.

 

RGB International Bhd reported 44% drop in 1QFY25 net profit to RM12.4m due to softer sales; a 0.4 sen dividend was declared.

 

British American Tobacco (Malaysia) Bhd reported a 20-year low net profit, dropping over 22% to RM23.3m in 1QFY25. This decline was attributed to seasonal factors and an early Ramadan; a 7.5 sen/share dividend was declared.

 

Datuk Farhash Wafa Salvador has resigned as the non-independent non-executive chairman of 7-Eleven Malaysia Holdings Bhd, citing other interests.

 

LYC Healthcare Bhd has been classified as a Guidance Note 3 (GN3) company on Bursa Malaysia's ACE Market as its shareholders' equity fell below 25%.

Sentiment: Negative
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