State-Specific Thematic Focus

Market Review

Malaysia: The FBMKLCI (-0.87%) extended its losses for the second consecutive day, ending at 1,600.81 pts, as Utilities heavyweights dragged down the index. All sectors ended negatively, with the Construction (-3.25%) sector declining the most following profit-taking activities across the Construction heavyweights.

Global markets: Wall Street was closed out of respect for the passing of former US President Jimmy Carter, while Wall Street futures are down ahead of the upcoming jobs report later today. Meanwhile, the European market ended higher, while Asian market closed lower as the slowdown in China CPI dented the sentiments.

The Day Ahead

The local front continued to close on a negative tone, with YTL-related counters dragging the key index lower. Meanwhile, equity markets in the US were closed in observance of the passing of former US President Jimmy Carter. As the time of writing, Wall Street futures are down, and traders are shifting their attention to the December nonfarm payrolls due later today. In the commodities market, Brent crude oil traded above USD77 level amid declining US inventories. Gold prices are hovering along the USD2670 level, while CPO prices have fallen below RM4,300.

Sector Focus: As Wall Street futures slides, this could spillover to stocks on the local front. However, we believe the market will focus on state-specific thematic plays; (i) Sarawak - PM Anwar's proposal to position Sarawak as Malaysia's energy hub is expected to drive further developments in the state, benefiting East Malaysia-related counters, (ii) Penang - the commencement of six water projects in Penang, worth over RM1.8bn, alongside the start of the Penang LRT project, is expected to boost the Penang-related counters and (iii) Johor - the formalisation of the JSSEZ, coupled with ongoing FDI inflows and data center investments in Johor, is anticipated to benefit the Johor-related counters.

FBMKLCI Technical Outlook

The FBMKLCI broke down the MA lines and is currently testing the key 1,600 psychological support. The MACD negative histogram continued to expand, while RSI reading is below 50, indicating negative momentum at the current juncture. Resistance is anticipated around 1,615-1,620, while support is set at 1,580-1,585.

Company Briefs

Public Bank Bhd's (PBBANK) conditional mandatory takeover offer for the remaining shares of insurer LPI Capital Bhd (LPI) that it does not own has lapsed, after it failed to secure sufficient acceptances by the close of the offer on Thursday. At the close of the offer, Public Bank and its persons acting in concert (PACs) held 49.57% of LPI's total issued shares - an increase of a mere 31,100 additional shares (0.01%) from the 49.56% it held when it posted the offer on Dec 19, 2024. (The Edge)

Yinson Holdings Bhd's (YINSON) third floating production storage and offloading (FPSO) vessel in Brazil - FPSO Atlanta, has achieved first oil. The vessel has been officially delivered to Brava Energia SA, and holds a 15-year firm charter which contract value is estimated at US$1.98bn (RM8.92bn). (The Edge)

Dialog Group Bhd (DIALOG) has secured the final investment decision (FID) for the field development and abandonment plan under the Baram Junior Cluster Small Field Asset Production Sharing Contract (PSC), amounting to US$235m (RM1.02bn). It aims to achieve first gas production within two years. The PSC spans a 14-year duration, comprising a two-year pre-development phase, a two-year development phase, and a production phase lasting 10 years or until the contract expires, whichever comes first. (The Edge)

Hibiscus Petroleum Bhd (HIBISCS) has awarded T7 Global Bhd (T7GLOBAL) a contract to undertake maintenance, construction and modification (MCM) work for a period of six-month with an undisclosed value. (The Edge)

Major shareholders of NPC Resources Bhd (NPC) are in discussions about a potential proposal to privatise the Sabah-based palm oil producer at RM2.82 per share. According to a joint statement by Jubilant Ventures Sdn Bhd and NPC's executive director and group managing director Datuk Loo Pang Kee, these discussions are exploratory and ongoing, with no certainty that the proposal will proceed. (The Edge)

MPHB Capital Bhd's (MPHBCAP) shares will be suspended, effective Jan 22, to facilitate the company's selective capital reduction before it is taken private. The selective capital reduction involves a cash distribution of RM1.70 for each share held as at Jan 23. All shareholders, except for Casi Management Sdn Bhd and MWE Holdings Sdn Bhd, are entitled to the cash distribution. (The Edge)

Parkson Holdings Bhd (PARKSON) has secured a 10-year tenancy agreement for its department store operations in Liupanshui, the Guizhou province of China. The tenancy will commence Jan 1, 2027, and conclude on Dec 31, 2036. Parkson noted that the Hong Kong Stock Exchange has classified the agreement as an asset acquisition amounting to 46.3m yuan (RM28.2m). (The Edge)

Green Packet Bhd's (GPACKET) wholly-owned subsidiary Packet Interactive Sdn Bhd (PISB) has obtained a digital lending licence from the Ministry of Housing and Local Government. Same as PISB's existing money-lending licence, the new digital lending licence is valid until Aug 15, 2026. This will enable the company to expand its range of financial products and services. (The Edge)

Target 1 Sdn Bhd, South Malaysia Industries Bhd's (SMI) largest shareholder with a 30.67% stake, announced on Thursday that the company's extraordinary general meeting (EGM) proceeded as scheduled with the resolutions to appoint six new directors, including former Perak police chief Datuk Pahlawan Mior Faridalathrash Wahid, being passed. (The Edge)

Pos Malaysia Bhd's (POS) indirect wholly-owned subsidiary Pos Logistics Bhd has set a deadline of February 25 for SWA Shipping Sdn Bhd to resolve the fulfilment of the acquisition of PNSL Bhd for RM123.21m. (The Edge)

Source: PublicInvest Research - 10 Jan 2025