FOMC Meeting Will Be The Key Focus

Market Review

Malaysia: The FBM KLCI (-0.56%) ended lower, in line with the negative performance in the regional stock markets, dragged by selected Telco, Banking and Industrial Product heavyweights. On the broader market, the Property sector (+1.03%) was the leading sector, while the Utilities sector (-0.58%) declined.

Global markets: Wall Street ended higher led by Energy and Utilities stocks, meanwhile traders will be eyeing the upcoming FOMC meeting this week. The European stock markets ended higher, while Asia ended mostly lower. The Nikkei ended higher despite The Bank of Japan raising interest rates.

The Day Ahead

The FBM KLCI closed lower for the session with the profit taking activities seen within selected Banking heavyweights. In the US, we noticed trading activities had slowed down ahead of the conclusion of the FOMC meeting as the market is looking forward to the Fed’s statement in order to understand the timing of the interest rate cut. Similarly, we opine that the overall market conditions on the local front will turn softer with profit taking activities emerging after recent rebound on small caps. On the commodity markets, Brent oil has traded positively for the fifth session, breaching above the USD87/bbl mark. For the FCPO, it has pulled back, but trading above the RM4,200 level.

Sectors focus: Given the recent upward trend on Brent oil above the USD87 level, we believe the traders will be focusing on the O&G sector at least for the near term in view of higher capex from Petronas this year as well. Besides, we noticed consumer stocks were having an increase in trading activities following Apollo’s strong dividend payout, this may provide upside opportunities within the sector. Also, we favour the Telco, Finance, Property, Solar as well as Packaging industries.

FBMKLCI Technical Outlook

The FBM KLCI index ended lower. The technical readings on the key index were mixed, with the MACD Histogram hovering flattish along 0, while the RSI is above 50. The resistance is envisaged around 1,555-1,560 and the support is set at 1,525- 1,530.

Company Brief

YTL Power International has set up YTL AI Cloud, a specialised provider of massive- scale graphics processing unit (GPU)-based accelerated computing, to deploy and manage one of the world’s most advanced supercomputers on Nvidia Grace Blackwell-powered DGX Cloud, an artificial intelligence (AI) supercomputer for accelerating the development of generative AI. YTL Power said it is among the first companies to adopt the Nvidia GB200 NVL72, which is a multi-node, liquid-cooled, rack-scale system with fifth-generation NVLink. The supercomputer will be interconnected by the Nvidia Quantum InfiniBand networking platform. (The Edge)

Integrated palm oil milling services provider Ecoscience International Bhd is partnering with Netherland renewable energy firm Maatschappij Wilhelmina NV (Wilhelmina), to build and manage Wilhelmina’s TG2 black pellet plant in Kuantan, Pahang at an estimated cost of US$60m (RM283.65m). Wilhelmina will finance, own and operate the TG2 black pellet plant. Meanwhile, Ecoscience will undertake the engineering, procurement and construction (EPC) work for the plant. (The Edge)

Eita Resources Bhd said its 60%-owned unit has won a RM47.96m contract from Tenaga Nasional Bhd to supply a new outdoor transmission substation in Ayer Puteh, Perak. The scope of work includes the erection, testing and commissioning of the 132kV conventional substation, as well as civil, transmission lines and remote ends relay retrofits by which the two-year contract is effective from March 8. (The Edge)

FGV Holdings Bhd said it has been granted a further six-month extension until Sept 2 by Bursa Securities to comply with the public shareholding spread requirement. This marks the sixth time the plantation group has received an extension from the regulator to comply with the requirement. FGV said its public shareholding spread remained at 13.09% as of Feb 16, compared to the minimum requirement of 25%. (The Edge)

Datuk Farhash Wafa Salvador, who recently emerged as a substantial shareholder in HeiTech Padu Bhd with a 15.91% stake, has clarified that he shares ownership of the shareholding in the company, held via private vehicle Rosetta Partners Sdn Bhd, with Kelantan's Sultan Muhammad V. He emerged as a substantial shareholder in HeiTech Padu after Rosetta Partners bought 6.16m shares on March 11 and 9.69m shares on March 12, resulting in a 15.91% stake in the company. Rosetta Partners is wholly-owned by Mfivesouthsea Sdn Bhd, which is in turn jointly-owned by the sultan and Farhash. (The Edge)

South Malaysia Industries Bhd (SMI) has decided against tabling Datuk Au Yee Boon-related company Honsin Apparel Sdn Bhd’s resolutions to appoint two new directors at the group’s annual general meeting next week. SMI said this is pursuant to Rule 15.01 of the Rules on Take-Overs, Mergers and Compulsory Acquisitions (Take-over Rules), stipulating that no nominee of an offeror or persons acting in concert shall be appointed to the board, nor may an offeror and persons acting in concert exercise voting shares or voting rights in the offeree, until the offer document has been dispatched. (The Edge)

Source: Mplus Research - 20 Mar 2024