Review & Outlook

The local market continued its upward trajectory on Wednesday lifted by bargain hunting interest in key blue-chip heavyweights in the plantation, banking and transportation sectors. The FBM KLCI added 7.34 points to close at 1,587.80, off an early low of 1,581.40 and high of 1,590.81, as gainers edged losers 512 to 505 on lower turnover of 2.97bn shares worth RM2.24bn.

Market sentiment could turn cautious following US President Donald Trump's statement that his administration is considering imposing a 10% tariff on imports of Chinese-made goods as soon as February 1st. Immediate index resistance is maintained at 1,605, with next upside hurdles at 1,630, followed by 1648. Immediate support remains at 1,550, with stronger supports at the 6/8/24 low of 1,529 and 1,500 psychological level.

Tenaga looks attractive to bargain for rebound upside towards the 100- day ma (RM14.20), with a confirmed breakout to aim for the 100%FP (RM14.99) and RM15.71 going forward. Crucial support from the 61.8%FR (RM12.87) and 50%FR (RM12.22) cushions downside. Any further weakness on DNEX towards the lower Bollinger band (36sen) should encourage bargain hunting for recovery upside towards the 61.8%FR (45sen), with a convincing breakout above the 50%FR (50sen) to target the 38.2%FR (54sen) ahead. Stronger support is from the low of 18/01/24 (31sen).

News Bites

• Sunway Bhd has started the ball rolling for the initial public offer of its healthcare unit Sunway Healthcare Group, according to sources.

• Arina, Sime Darby Property Bhd's first single-storey linked homes in Bandar Ainsdale, achieved full take-up of all 118 units within hours of its launch on 18 January 2025. Arina is scheduled for completion in October 2026.

• Power Root Bhd has been slapped with a lawsuit from Export-Import Bank of Malaysia Bhd for RM7.4mn over insurance claim payout dispute.

• Jentayu Sustainables Bhd said the Securities Commission Malaysia has denied the group's bid for an extension of time up to 26 March 2025, to complete its acquisition of three RE firms proposed in 2021.

• The public portion of ACE Market-bound Northern Solar Holdings Bhd's initial public offering has been oversubscribed by 73.2 times. The group had received 25,772 applications for 1.5bn shares valued at RM924.6mn.

• TechStore Bhd, which provides hardware and software to businesses, has fixed its IPO price at 20.0sen/share ahead of its listing on the ACE Market of Bursa Malaysia.

• Sentral REIT posted a flat 1.3% YoY increase in NPI for 4QFY24 to RM36.7mn. Quarterly revenue increased 5.5% YoY to RM47.4mn, mainly due to higher revenue generated from Menara CelcomDigi, Sentral Building 3, Sentral Building 1 and Sentral Building 2.

• AME Real Estate Investment Trust reported a 1.4% YoY increase in NPI for the 3QFY25 to RM11.7mn, thanks to contributions from a newlyacquired property and tenancy renewals at higher rates.

• Gadang Holdings Bhd 2QFY25 net profit rose more than 5-fold to RM7.1mn, mainly due to a higher contribution from the Construction Division and the reversal of impairment losses on a joint ventures project.

• Hua Yang Berhad 3QFY25 net profit declined by 4.3% YoY to RM2.3mn mainly due to completion of Aston Acacia, Bukit Mertajam in the quarter under review.

• Aneka Jaringan Holdings Bhd reported a 68.5% YoY increase in net profit to RM2.1mn for the 1QFY25. Quarterly revenue rose 35.2% YoY to RM79.5mn. The Group's total order book as at 30 November 2024 stood at RM217.4mn.

• Bank Negara Malaysia on Wednesday kept the benchmark interest rate unchanged at 3.0%, comfortable with its outlook for sustained economic growth and manageable inflation.

• Inflation in Malaysia eased slightly and was marginally slower than expected in December as prices of non-food items and services rose at a more moderate pace, official data released on Wednesday showed.

• Indonesia will exempt oil and gas exporters from its new rule that all proceeds from natural resource exports be kept onshore for a year, as companies urge adjustments to the rule out of concern over its impact on their cashflows.

• The Conference Board's measure of the US leading indicators fell by 0.1% in December, as expected in a survey compiled by Bloomberg as of 7:35 am ET and following an upwardly revised 0.4% increase in November.

• UK's budget deficit totaled £17.8bn (US$21.9bn) in December, more than double the £7.7bn recorded a year earlier as debt costs pushed up UK government borrowing more than forecast last month, highlighting the fiscal challenges facing Chancellor of the Exchequer Rachel Reeves.

Source: TA Research - 23 Jan 2025