Window Dressing Activities Set to Begin

Market Review

Malaysia: In spite of the strong regional market performance, the FBMKLCI (-0.20%) bucked the trend and closed lower at the 1594 level, dragged down by heavyweights like TENAGA (-32.0 sen) and MISC (-15.0 sen). In the broader market, the Plantation (+0.57%) sector gained the most, benefiting from the rising CPO price.

Global markets: While the dollar dipped on December rate cut bets, Wall Street rebounded and closed higher, buoyed by gains in technology stocks like NVIDIA, while traders shifted towards retail stocks ahead of the holiday season. Meanwhile, the European markets ended higher, while Asean markets closed mixed.

The Day Ahead

While the FBMKLCI retreated below the 1,600 level, we believe a rebound could emerge as we enter the window dressing period. Meanwhile, the US markets bounced back and closed higher, driven by gains in technology and retail stocks as the holiday season kicked off. Looking ahead, traders will monitor key economic indicators, including (i) ISM PMI data, (ii) labour market updates (JOLTS, ADP employment, unemployment rate, and non-farm payrolls), and (iii) weekly unemployment claims. In the commodities market, Brent crude oil traded flat around USD72 per barrel, while gold prices rebounded above USD2,600 as the dollar weakened on expectations of December rate cuts and heightened geopolitical tensions. CPO prices surged above the RM5,000 level. Meanwhile, Bitcoin remained elevated, breaking above the USD97k mark and approaching the USD100k level.

Sector Focus: While the earnings of export-oriented stocks were impacted by forex losses due to the ringgit's strength in 3Q24, we maintain a positive outlook on sectors such as Technology and Glove, which could benefit from the ringgit's depreciation of at least 7.5% since the end of September. Also, we expect sustained buying interest in Plantation stocks, supported by (i) the continued upward momentum in CPO prices, and (ii) strong earnings reported by plantation companies.

FBMKLCI Technical Outlook

The FBMKLCI is hovering below the 1,594 level, and all the MAs line. The MACD Histogram, however has turned positive, but RSI is still trending below 50, indicating that the momentum is mixed at this juncture. The resistance is envisaged around 1,609-1,614, and the support is set at 1,574-1,579.

Company Briefs

Public Bank Bhd (PBBANK), Malaysia’s third-largest bank by assets, posted a 12% increase in net profit to RM1.91bn for the third quarter ended Sept 30, 2024 (3QFY2024) from RM1.7bn a year ago, thanks to operating income growth. Year-on- year, net interest income rose 5% and income from Islamic banking was up 6.5%, while non-interest income such as fees and commissions climbed 18%. Revenue rose to RM6.81bn from RM6.48bn a year earlier. (The Edge)

RHB Bank Bhd (RHBBANK)’s net profit grew 28% to RM833.19m for the 3QFY2024, from RM649.95m a year earlier, as the banking group booked sharp currency gains of RM659.86m. Excluding the net forex gains, the banking group's other operating income would have been RM394.14m. It was RM435.88m a year ago including a net forex gain of RM85.22m. Quarterly revenue increased by 7% to RM4.51bn, from RM4.22bn in the corresponding quarter. (The Edge)

Padini Holdings Bhd (PADINI) said the retail business remains tough amid rising cost of living, after the apparel company reported a 57% sharp drop in profits. Net profit for the first quarter ended Sept 30, 2024 (1QFY2025) fell to RM11.52m from RM26.67m a year earlier, on currency loss, higher staff costs and depreciation, which offset its 1% growth in revenue to RM393.14m, from RM388.2m. Nevertheless, it kept up dividend payouts, with a second interim distribution of 2.5 sen per share — higher than the earnings of 1.75 per share — to be paid on Dec 27. (The Edge)

QL Resources Bhd's (QL) net profit rose 4.6% to RM128.28m in the second quarter ended Sept 30, 2025 (2QFY2025) from RM122.64m a year earlier, on the back of improved revenue contributions from all its business segments, which helped offset increases in tax expenses and finance costs. Quarterly revenue climbed 10.8% to RM1.87bn from RM1.69bn. (The Edge)

LBS Bina Group Bhd (LBS) said that it is unlikely for the group to meet its internal sales target of RM1.8bn this year, due to deferred launches caused by a lengthy approval process. As of Nov 28, it had registered total property sales of RM1.21bn, with RM183.5m in bookings. It declared a special dividend of 2.6 sen per share, as its net profit surged four-fold for the third quarter, carried by an RM137m one-off gain from the disposal of Lamdeal Investments Ltd. Net profit for the quarter 3QFY2024 ballooned 315.43% to RM167.06m — its highest since 3QFY2013 — from RM40.21m. Excluding the one-off disposal gain, its adjusted pre-tax profit for 3QFY2024 comes to RM77.3m. Quarterly revenue declined 19.16% to RM377.39m from RM466.86m on certain property and construction projects’ completion or near completion. (The Edge)

IGB Bhd (IGBB) has declared a dividend payout of 12 sen per share for FY2024 — comprising an interim dividend of 7 sen and a special dividend of 5 sen — as its net profit jumped 27% to RM73.7m in 3QFY2024, from RM58m, driven by higher contributions from its retail, commercial and hotel segments. Revenue grew 6% to RM419.3m from RM395.1m, largely driven by its hotel business amid higher occupancy and room rates. The 12 sen dividend IGB declared — much higher than the 7 sen it announced in the Jan-Sept period last year — will be paid Dec 20. (The Edge)

Low-cost, medium-haul airline AirAsia X Bhd (AAX)’s net profit jumped 22 times to RM121.64m in 3QFY2024, from RM5.56m, as currency gains and higher revenue offset a jump in operating expenses. It booked RM125.29m from both realised and unrealised net foreign exchange gains. Revenue meanwhile rose 23% to RM795.03m, from RM648.36m on higher ticket sales and ancillary revenue. It expects to sustain its momentum in 4QFY2024, as the final quarter is expected to be the busiest for international travel industry. (The Edge)

Panasonic Manufacturing Malaysia Bhd (PANAMY) reported its lowest quarterly net profit in three years of RM2.47m in the second quarter ended Sept 30, 2024 (2QFY2025), hit by a foreign exchange (forex) loss of RM16.4m and increased raw material costs. It posted a net profit of RM33.22m in 2QFY2024. Quarterly revenue was flat at RM236.07m, compared with RM236.42m. It declared an interim dividend of 15 sen per share, unchanged from last year, payable on Jan 20. (The Edge)

Velesto Energy Bhd (VELESTO) made a net profit of RM42.93m for 3QFY2024, over a 30-fold jump from RM1.22m in 3QFY2023. Revenue grew 21.83% to RM352.36m from RM289.24m, thanks to higher utilisation and average daily charter rates for jack-up rigs under its drilling services and an extension of its integrated rig, drilling, and completion (i-RDC) project in the quarter. (The Edge)

Sapura Energy Bhd (SAPNRG) saw the impending departure of its chairman Datuk Mohammad Azlan Abdullah and chief executive officer Datuk Mohd Anuar Taib. Azlan will step down from his position on Jan 31, 2025, due to "other personal commitments". He has been on a "leave of absence" from Sapura Energy since June 26 this year amid ongoing investigations by the Malaysian Anti-Corruption Commission (MACC). Azlan is currently the group CEO of highway concessionaire Projek Lintasan Kota Holdings Sdn Bhd, also known as Prolintas. It was reported that MACC had arrested the CEO of a highway concessionaire in the Klang Valley, along with seven others, as part of an investigation into alleged bribery related to two highway projects worth RM1.67bn. Meanwhile, Anuar will step down from his role as CEO and executive director on Dec 31, 2024, after serving three years in the position since March 2021, to pursue "personal endeavours". (The Edge)

Bursa Malaysia has approved Practice Note 17 (PN17) company Pharmaniaga Bhd’s (PHARMA) regularisation plan, which was revised to adjust its capital reduction and exclude warrants from its rights issue, exactly a year after the initial iteration was announced. The regularisation plan, which comprises a RM520m capital reduction, a rights issue to raise up to RM353.52m and a RM300m proposed private placement, was approved by the bourse operator on Friday. The plan is still pending shareholder approval at a general meeting to be announced later. (The Edge)

Hextar Industries Bhd (HEXIND) has signed an agreement to bring in Chinese coffee house chain Luckin Coffee to Malaysian shores. It will have the exclusive rights to develop, open, and operate coffee shops under the Luckin Coffee brand nationwide in Malaysia. The rights would be for 10 years, with possible renewal for two successive five-year terms. Founded in 2017 and headquartered in Xiamen, Luckin Coffee operated 21,343 stores globally as of the third quarter of 2024. (The Edge)

Source: Mplus Research - 2 Dec 2024