Review & Outlook

The local market drifted lower for a fourth straight session on Tuesday, in line with the global sell-down of technology stocks as the launch of powerful and less expensive Chinese AI technologies continues to unsettle investors sentiment. The FBM KLCI lost 6.28 points to close at 1,552.69, off an opening high of 1,557.44 and low of 1,544.87, as losers swarmed gainers 537 to 372 on lower turnover totaling 2.19bn shares worth RM2.01bn.

Market sentiment is likely to remain muted this week as most investors are away for the Chinese New Year celebration, while the markets await key inflation data and corporate earnings from the U.S. Immediate index support remains at 1,550, with stronger supports at the 6/8/24 low of 1,529 and 1,500 psychological level. Immediate resistance is maintained at 1,605, with next upside hurdles at 1,630, followed by 1648.

Any further correction on Bumi Armada shares towards key supports at the 76.4%FR (63sen) or the 61.8%FR (57sen) should attract bargain hunting prior to a technical rebound towards the 07/03/23 peak (73sen) with tougher resistance coming from the 123.6%FP (83sen). Likewise, Dialog shares are poised for recovery, with a confirmed breakout above the 38.2%FR (RM2.01) to enhance upside momentum towards the 50%FR (RM2.12) and 61.8%FR (RM2.24) ahead. Support from the 23.6%FR (RM1.86) and the 23/12/24 low (RM1.76) cushions downside risk.

News Bites

• Malaysia's Producer Price Index rose marginally by 0.5% YoY in December 2024, compared to a 0.4% decline in the previous month, according to the Department of Statistics Malaysia.

• Malakoff Corp Bhd has extended the deadline for fulfilling conditions precedent in its proposed 49% stake acquisition in E-Idaman Sdn Bhd by three months to April 28.

• TH Plantations Bhd's 60%-owned subsidiary, TH Pelita Simunjan Sdn Bhd, is facing a RM230.3mn lawsuit for alleged trespassing on native customary rights land in Simunjan, Sarawak.

• Axiata Group Bhd and Sinar Mas have signed two letters of intent to explore strategic partnerships.

• YNH Property Bhd says the independent assessment report for its joint venture and turnkey contracts, prepared by Messrs UHY, is expected to be finalized by Feb 15.

• Capital A Bhd and AirAsia X Bhd have agreed to extend the cut-off date for completing the disposal of AirAsia Aviation Group Ltd and AirAsia Bhd to AAX by two months from Jan 25 to March 24.

• Bank Negara Malaysia imposed an RM875,000 compound on AmBank (M) Bhd on Nov 18, 2024, for non-compliance with the Direction to Financial Institutions under the Financial Services Act 2013.

• Taghill Holdings Bhd will not proceed with a RM38.9mn contract to construct a 15-storey columbarium in the city centre due to rising material costs.

• Mah Sing Group Bhd expects its data centre venture to benefit from DeepSeek's advancements in AI, which leverage lower-powered chips for high-performance computing.

• Datasonic Group Bhd's subsidiary, Datasonic Technologies Sdn Bhd, has secured a one-year extension to its contract worth RM104.8mn for supplying passport chips to the Malaysian government.

• Salcon Bhd announced that its 70%-owned unit, Mentari Kamuning Sdn Bhd, a subsidiary of Energy Valley Sdn Bhd, has signed an enhanced dispatch agreement connection with Tenaga Nasional Bhd for a 7MWac solar energy facility in Sungai Siput, Kuala Kangsar.

• Ecobuilt Holdings Bhd has proposed a share capital reduction amounting to RM35mn and a rights issue to raise fresh capital.

• Eonmetall Group Bhd has proposed a private placement of up to 91.4mn shares (30% of its share base), aiming to raise RM22.1mn for loan repayments and working capital, including raw material purchases.

• Nestlé (M) Bhd continues to support underprivileged students through its Nationwide Back-to-School programme, benefiting around 4,000 students this year.

• Key Alliance Group Bhd has appointed Datuk Wira Farhash Wafa Salvador as its new chairman.

• EVD Bhd has appointed Datuk Seri Shahril Mokhtar as non-executive chairman, effective Feb 1.

• Thailand expects to complete its first high-speed rail network linking the country to China through Laos in 2030.

• The US Federal Reserve said it decided to maintain the target range for the federal funds rate at 4.25% to 4.50% in support of its dual goals of maximum employment and inflation at the rate of 2% over the longer run.

• The European Central Bank cut its interest rates by 25 basis points to 2.75% for a fourth policy session in a row as expected.

Source: TA Research - 31 Jan 2025