Positive Closing Amid Window Dressing Activities

Market Review

Malaysia: The FBMKLCI (+0.89%) extended its gains, closing higher at 1628, mainly driven by key heavyweights including TENAGA (+56.0 sen) and CIMB (+11.0 sen). TENAGA's share price experienced a significant gap up last Friday following its proposed electricity tariff hike from 2H2025 onwards.

Global markets: The dollar fell in tandem with the performance of Wall Street, as technology heavyweights dragged sentiment, with investors reducing their positions in an overstretched valuation environment. Meanwhile, the European market closed higher while Asean market ended the day on a mixed note.

The Day Ahead

The local front gained momentum, buoyed by buying support in Utilities heavyweights like Tenaga Nasional, following the proposed tariff hike for 2H25 onwards and year-end window dressing activities. Meanwhile, in the U.S., Technology heavyweights weighed on Wall Street sentiment in the final stretch of the year. This week, traders will keep track of the key economic data like the US unemployment claims and the ISM Manufacturing PMI. In the commodities market, Brent crude oil traded within a tight range of USD73 per barrel, while gold fluctuated between USD2,610- $2,640, both maintaining a negative biased. However, CPO prices rebounded strongly, closing above the RM4,600 mark.

Sector Focus: While the local front may set to open lower, tracking the weaker tone of the overnight US market, we see trading opportunities arising in solar-related counters SLVEST after TNB was shortlisted to develop a 500MW solar plant in Kedah under the LSS5 programme. Meanwhile, we maintain a positive outlook on export- oriented sectors like Technology and Gloves, which are likely to benefit from an elevated USD environment. For a more conservative play, we believe Healthcare and Consumer Products and Services will provide stability amid year-end fluctuations, supported by ongoing window dressing activities.

FBMKLCI Technical Outlook

The FBMKLCI closed on a bullish note after breaking above the EMA60. The MACD histogram has turned positive, while the RSI has crossed above 50, suggesting that the momentum is positive at the current juncture. Resistance is anticipated around 1,643-1,648, and support is set at 1,608-1,613.

Company Briefs

Khazanah Nasional Bhd has invested in the Cambrian Fund and California-based AI firm Syntiant Corp through its RM1bn Dana Impak fund. The Cambrian Fund, founded by the team behind Penang-based automated test equipment manufacturer ViTrox Corp (VITROX), aims to support SMEs working on IR4 technologies like machine vision, AI and robotics. Khazanah is an anchor investor in the fund, which has raised RM100m so far. (The Edge)

Kim Loong Resources Bhd (KMLOONG) posted a record quarterly net profit of RM49.96m for 3QFY2025, up 4.1% year-on-year from RM47.97m. This is despite a slight drop in revenue to RM446.38m from RM448.68m a year ago. For the nine months of FY2025, net profit rose 13.1% to RM138.98m, with revenue up 6.9% to RM1.24bn, driven by higher selling prices in its plantation and palm oil milling divisions. (The Edge)

Johor-based property developer Crescendo Corporation Bhd (CRESNDO) reported a net profit of RM103m for 3QFY2025, a fivefold increase from RM18m a year earlier, driven by data centre land sales in Johor's Nusa Cemerlang Industrial Park. Revenue jumped 127% to RM231.2m from RM101.8m, with property development and construction contributing over 85% of revenue and 89% of operating profit. No dividend was declared for the quarter. In a separate filing, Crescendo said its indirectly-owned unit plans to sell five plots of land in Pontian, Johor, for RM56.5m. Its subsidiary, Unibase Concrete Industries, will sell two plots measuring 6.37 hectares for RM18.9m, while Unibase Pre-Cast will sell three plots measuring 12.7 hectares for RM37.7m. The disposals are expected to yield a post-tax gain of RM26.78m. (The Edge)

JcbNext Bhd (JCBNEXT) has sold a 1.8% stake in Taiwan-listed 104 Corp for T$133.93m (RM18.11m) to diversify its investment portfolio and reduce concentration risk. The sale, conducted between Aug 22 and Dec 27, reduced JcbNext's stake in 104 Corp to 13.5% and generated an expected net gain of RM9.39m. Proceeds will be reinvested within two years, subject to market conditions. (The Edge)

OCB Bhd (OCB) is selling its loss-making subsidiary, Agrow Malaysia Sdn Bhd, for RM3m. The buyer, Tan Sim Lam, will also assume RM20.32m of Agrow's debt. This move is part of OCB's strategy to improve finances and focus on its core businesses: consumer foods, bedding products and property development. The sale signifies OCB's exit from the building materials sector. (The Edge)

Paragon Globe Bhd's (PGLOBE) shareholders have approved several key land deals and a joint development with Tropicana Corp Bhd's (TROP) unit during an EGM. The approvals include selling 67.62 acres of Johor land for RM337.3m, acquiring 34.18 acres in Plentong for RM63.52m, and securing development rights for 7.13 acres in Danga Bay for RM102.46m. All resolutions passed with 99.99% shareholder support. (The Edge)

Chinese national Huang YongKang has acquired a 9.09% stake in Asia Poly Holdings Bhd (ASIAPLY) by taking up 95.85m shares through a private placement, making him the second-largest shareholder after executive chairman Yeo Boon Leong, who holds an 18.01% stake. Huang, who is also a shareholder of Zhen Xing Plastic Sdn Bhd - a recycling company in which Asia Poly owns a 35% stake - acquired the shares on Dec 23. Based on the placement price of seven sen per share, the stake is valued at RM6.71m. (The Edge)

Nova MSC Bhd (NOCAMSC) has decided not to proceed with share subscription deals with two Singapore-based investment firms, Jostar Investment VCC and Mark Investment Group VCC, due to delays in completing internal and regulatory processes. Instead, the company is in advanced talks with another undisclosed investor for a potential partnership in EyRIS, which could provide access to the Chinese market and expand product opportunities. (The Edge)

Cocoaland Holdings Bhd co-founder Lau Pak Lam has reduced his stake in PUC Bhd (PUC) by selling 100m shares, or a 3.6% stake, in a direct transaction, leaving him with 118.5m shares, or a 4.26% stake. PUC CEO Cheong Chia Chou also sold 40m shares (1.44%) for RM2m, reducing his stake to 6.58%. The 140m shares, or a 5.04% stake, were likely acquired by businessman Datuk Seri Ting Teck Sheng, who has become a new substantial shareholder. Meanwhile, Liew Fook Meng, another co- founder of Cocoaland, increased his stake in PUC to 8.8% by acquiring an additional threem shares. (The Edge)

Separately, PUC announced that Pictureworks International Holdings Ltd, an associated company in which PUC holds 27.53% equity interest, had on Thursday made a public filing with the US Securities and Exchange Commission (SEC) for its proposed listing on Nasdaq. However, the details such as pricing, share quantity and timeline have not been disclosed. Renaissance Capital estimates that Pictureworks could raise up to US$8m (RM35.85m) through the offering. (The Edge)

SCGM Bhd's (SCGM) substantial shareholders are to inject their agriculture-related business Eramas Global Group Sdn Bhd into the cash company in return for RM207.94m worth of shares at 36.5 sen apiece, as part of the company's regularisation plan. Prior to that, SCGM intends to distribute RM48.14m, cash, in the form of a 25 sen per share special dividend to its shareholders. The vendors comprise seven individuals including Chin Kok Tian and Yan Hua Lan. Chin and Yan collectively control a 16.13% stake in SCGM. (The Edge)

Source: PublicInvest Research - 30 Dec 2024