Review & Outlook

The local market extended its rebound on Wednesday, driven by further recovery among construction, property and technology heavyweights that suffered selloffs sparked by concerns over their data center investments. The FBM KLCI added 9.95 points to close at 1,574.51, off an early low of 1,564.43 and high of 1,576.45, as gainers led losers 622 to 345 on better turnover of 2.86bn shares worth RM2.33bn.

Market sentiment should remain upbeat on easing concerns over a fullblown US-China trade war, amid hopes that there may be opportunities for concession deals to delay or lower trade tariffs, as with Mexico and Canada. 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.

SKP Resources is attractive to bargain ahead of an oversold rebound towards the 50%FR (RM1.12), with the 38.2%FR (RM1.23) and 23.6%FR (RM1.37) as next upside hurdles, while key chart supports comes from the 06/08/24 low (95sen) and the 76.4%FR (87sen). VSI will need breakout confirmation above the 76.4%FR (RM1.17) to boost upside momentum towards the 15/08/24 high (RM1.25), with next major resistance from the 15/07/24 peak (RM1.32). Crucial support at the 50%FR (RM1.00) and 38.2%FR (93sen) limits downside risk.

News Bites

• Malaysia is on track to meet its 2025 gross domestic product growth target of 4.5% to 5.5% despite the risks posed by the tariff war, said Economy Minister Datuk Seri Rafizi Ramli.

• Malaysia recorded just over 25mn international tourist arrivals in 2024, falling short of its target of 27.3mn for the year.

• The World Bank has recommended that Malaysia reinstate the goods and services tax to bolster the nation's tax revenue and added untaxed capital income as a major weakness in Malaysia's tax system.

• CapitaLand Malaysia Trust is acquiring three industrial properties in Senai Airport City for RM72mn from Gromutual Bhd's subsidiary, Rainbow Entity Sdn Bhd.

• Khazanah Nasional Bhd has identified three key pillars, which are customer experience, technology, and connectivity, to enhance Malaysia Airports Holdings Bhd's future operations, according to Managing Director Datuk Amirul Feisal Wan Zahir.

• Gamuda Bhd has inked an exclusive agreement with the Perak government to facilitate raw water transfer from Sungai Perak to Bukit Merah and develop related infrastructure for treated water distribution.

• ITMAX System Bhd's 65%-owned subsidiary, Southmax Sdn Bhd, secured a 15-year contract to operate an outdoor parking system in Pontian, Johor, effective Feb 1, 2025.

• Citaglobal Bhd has stated that it has no immediate plans to develop the 1.58-acre land at Jalan Tun Razak, Kuala Lumpur, which it is acquiring from Bank Islam Malaysia Bhd for RM73mn.

• YTL Corp Bhd's Singapore-listed unit, NSL Ltd, has been granted a four-month extension until June 6, 2025, to meet SGX's 10% public shareholding requirement.

• AMMB Holdings Bhd has approved a RM120mn financing facility for Huawei, reinforcing its role as a panel bank supporting the Chinese IT giant's operations in Malaysia.

• Hextar Industries Bhd's independent non-executive chairman, Datuk Chan Choun Sien, has resigned due to other commitments.

• KLCCP Stapled Group reported a 12% YoY increase in net profit to RM430.9mn for 4QFY24, up from RM384.6mn in 4QFY23, driven by full ownership of Suria KLCC Mall and higher fair value gains.

• The Institute for Supply Management said its services PMI dipped to 52.8 in January from a revised 54.0 in December.

• Iran's President Masoud Pezeshkian urged Opec members to unite against possible US sanctions, after US President Donald Trump said he would seek to drive Tehran's oil exports to zero.

Source: TA Research - 6 Feb 2025