Focusing On JS-SEZ

Market Review

Malaysia: The FBMKLCI (-0.21%) extended its losses for the second day, as sell-off in Wall Street dragged down the sentiment in the local bourse. Selling pressure was observed in key heavyweights including TENAGA and PBBANK. Meanwhile, the Energy (+2.51%) sector gained the most, contributed by the spike in crude oil prices.

Global markets: Wall Street rebounded after a fresh demand by tech stocks, as chip giant Nvidia climbed 4.7% while server maker Supermicro jumped 10.9%. Meanwhile, the European market retreated, while Asian market ended mixed as investors continue to assess Beijing's policy signals and the political turmoil in South Korea.

The Day Ahead

The local front extended its pullback for a second session at the start of the year, as profit-taking activities were observed across several blue-chip counters after the year-end window dressing activities. In the US, S&P500 and NASDAQ snapped their 5-day losing streak, driven by a rally in tech stocks as bargain hunting activities happened across some of the 2024's dominant themes, including artificial intelligence. This week, traders will also keep an eye on several key economic data, including (i) Eurozone CPI, (ii) China's CPI and also (iii) ISM Non-Manufacturing PMI. In the commodities market, Brent crude oil gained momentum to hover above USD76 level supported by cold weather in the Europe and US, which could point to stronger demand. The gold price traded slightly higher above USD2,600, while CPO prices retreated below the RM4,400 mark.

Sector Focus: With the Singapore's Prime Minister visiting Malaysia today for the formalisation of the Johor-Singapore Special Economic Zone (JS-SEZ), traders can refocus on Johor-related counters. Besides, given the recent rise in crude oil prices, we believe trading opportunities will continue to emerge in the Energy sector. Lastly, we expect data center investments to begin materialising earnings within the Construction, Building Materials, and Utilities sectors.

FBMKLCI Technical Outlook

The FBMKLCI formed a higher-low and higher-high formation and closed above all the MA lines. The MACD Histogram is trading at the positive territory, while the RSI reading is above 50, indicating positive momentum at the current juncture. Resistance is anticipated around 1,644-1,649, while support is set at 1,609-1,614.

Company Briefs

Petra Energy Bhd (PENERGY) has secured four contracts to provide pan-Malaysia offshore services to the national oil and gas company Petronas and its production sharing contractors. The jobs for undisclosed contract values involve offshore maintenance, construction, and modification (MCM) as well as hook-up and commissioning (HUC) services in Sarawak, Petra Energy said. The latest contract, secured from Petronas and announced on Friday, will last five years, with extension options of three plus two years, it noted. The contract with Petronas began on Sept 27, 2024. (The Edge)

Asia Internet Holdings Sdn Bhd has ceased to be a substantial shareholder in Cuscapi Bhd (CUSCAPI) after paring 5.29% stake in the point-of-sale systems provider. Asia Internet is a private vehicle of Wong Thean Soon, the managing director MyEG Services Bhd (MYEG). Also known as TS Wong, he still personally holds 21.96% in Cuscapi, making him the biggest shareholder of Cuscapi. The disposal on Dec 26 involved 50m Cuscapi shares. The value of the transaction was not disclosed though the block of shares would be worth RM10.25m based on Cuscapi's closing price of 20.5 sen on Dec 26. (The Edge)

Permodalan Nasional Bhd's unit, Yayasan Pelaburan Bumiputra (YPB), has now taken over the 5.02% substantial stake that Yayasan Ekuiti Nasional (YEN) held in offshore support vessel firm Icon Offshore Bhd (ICON) via Ekuiti Nasional Bhd (Ekuinas). This is because ownership of Ekuinas has now been placed under YPB, following the consolidation of Bumiputera-focused investment institutions into YPB - a move announced under Budget 2024 - to strengthen the development of Bumiputera businesses. Hence, YEN is no longer a substantial shareholder of Icon Offshore, while YPB has become a substantial shareholder due to Ekuinas Capital being its wholly owned unit. (The Edge)

Velocity Capital Partner Bhd (VELOCITY) has made its new largest shareholder Datuk Fam Chee Way its non-independent and non-executive director, effective Friday. On the same day, executive director Tan Yip Jiun resigned from his post "to pursue other interests". His resignation comes a day after he disposed of his entire 12.17% stake in the company to Fam. Fam, who has acquired another 16.61% stake in Velocity Capital from Datuk Liu Han Ming, now holds a 28.79% stake in the group. (The Edge)

Industrial services firm Swift Energy Technology Bhd (SET), which is slated to be listed on the ACE Market next Wednesday, made a net profit of RM5.18m for the fourth quarter ended Sept 30, 2024 (4QFY2024), on the back of RM29.3m in revenue. Earnings per share stood at 0.69 sen. No dividend was declared. This is the first interim financial report announced by Swift Energy, so no comparative figures are available as no interim financial report was prepared previously. The group's revenue for 4QFY2024 was mainly from its manufacturing segment, which contributed RM22.01m or 75.11% of total revenue. (The Edge)

Source: PublicInvest Research - 6 Jan 2025