Previous Day Highlights

23 January 2025 FBM KLCI closed higher mirroring Wall Street's strong overnight performance. The benchmark index up 0.46% or 7.34 pts to close at 1,587.80. Gainers were seen in transportation (+0.66%), plantation (+0.62%), and financial services (+0.58%); while losers were seen in technology (-1.11%), construction (-0.86%), and property (-0.57%). Market breadth was positive with 512 gainers against 505 losers. Total volume stood at 3bn shares valued at RM2.24bn.

Major regional indices trended negatively. HSI declined 1.63%, to end at 19,778.77. SHCOMP dropped 0.89%, to close at 3,213.62. Nikkei 225 up 1.58%, to finish at 39,646.25. STI slid 0.37%, to close at 3,781.21.

Wall Street closed higher as Tech Stocks Rallied. The DJIA added 0.30%, to end at 44,156.73. Nasdaq rose 1.28%, to close at 20,009.34. S&P500 rose 0.61%, to finish at 6,086.37.

News For The Day

Sentral REIT's net property income flat in 4Q

Sentral REIT’s 4QFY24 NPI (Net Property Income) rose a marginal 1.25% to RM36.7m YoY as revenue gains were offset by operating expenses for Menara CelcomDigi. Sentral REIT also declared a final distribution per unit (DPU) of 3.15sen. Looking ahead, Sentral REIT said the tenant-led market environment and cost inflation will continue to exert competitive pressures on the trust in the Klang Valley office and retail markets in FY25. – The Edge Market

AME REIT’s 3QFY3/25 net profit fell 8%

AME Real Estate Investment Trust’s 3QFY25 net profit fell 8% YoY to RM9.2m, as the figure in the corresponding quarter a year earlier was inflated by fair value gain on investment properties. AME REIT said it remains optimistic on prospects for the rest of the financial year, which will end on March 31, 2025, with full occupancy rates across its portfolio. The REIT's portfolio comprises 37 investment properties, of which 34 are industrial properties and three are workers’ dormitories. In October 2023, the trust completed the acquisition of i-Park@Indahpura in Kulai, Johor, for about RM27m. - The Edge Market

Power Root sued by EXIM Bank over loan default

Export-Import Bank of Malaysia (EXIM Bank) has filed a lawsuit against instant coffee manufacturer Power Root, seeking RM7.4m over an alleged loan default. Power Root, however, denies all claims and allegations in their entirety. The company maintains that its subsidiaries have strong grounds to contest the claims, asserting that insurance claims under the Comprehensive Policies were submitted in full compliance with the policy terms. The company also argued that the rights over the outstanding debts, which formed the basis of the insurance claims, had already been assigned to EXIM Bank. – The Edge Market

SC rejects Jentayu’s bid extension for RE firm acquisitions

Jentayu Sustainables said the Securities Commission Malaysia (SC) has denied the building material and renewable energy (RE) group’s bid for an extension of time to complete its acquisition of three RE firms proposed in 2021. Jentayu had proposed to acquire the three companies, which own and operate RE assets, back in September 2021, when it was then known as Ipmuda Bhd, in a move aimed at becoming a pure RE outfit. The acquisitions are deemed related- party transactions as the companies are owned by Jentayu executive chairman Datuk Beroz Nikmal Mirdin and his wife, Datin Nurhaida Abu Sahid. - The Edge Market

Our Thoughts

Wall Street closed higher with the S&P 500 hitting an all time high as tech stock led the way underpinned by Trump’s latest initiative on AI plus the impending corporate tax cuts. Meanwhile, the US 10-year yield inched higher at 4.613%. Over in Hong Kong, the HSI lost ground after a 6-day uptrend, dragged by major tech companies following Trump’s announcement of a USD500bn initiative to beat China in AI. Although it is still early days, we believe traders took the opportunity to lock in profits. On the home front, the FBM KLCI continues with its climb as bargain hunting activities took centre stage. For today, we anticipate the index to trend within the 1,585-1595 range with hopes that recent buying on blue chips may eventually instigate some retail interests back to the smaller cap space. Meanwhile, the Ringgit strengthened to RM4.436 in the absence of Trump’s tariffs which in turn saw a temporary easing of the US bonds yield.

Source: Rakuten Research - 23 Jan 2025

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