All Eyes Are On Trump's Policies

Market Review

Malaysia: The FBMKLCI (+0.36%) rebounded for the second consecutive day and closed higher at 1572.34 pts, led by MAYBANK and PMETAL. The Energy (+1.77%) sector was the best performer, supported by the recent rally in crude oil prices. Meanwhile, Financial Services (-0.05%) was the only sector in red.

Global markets: Wall Street was closed in conjunction with Martin Luther King Jr. Day. Meanwhile, the European market closed lower ahead of Trump's inauguration, as Trump's stern policies towards EU and anticipated tariffs sparked fear among the region. In contrast, Asian markets ended higher, led by gains in Hong Kong stocks.

The Day Ahead

The local bourse continued to close higher, buoyed by gains in the Banking and Utilities heavyweights. In the US, market was closed due to Martin Luther King Jr. public holiday, with investors focusing on President Trump's inauguration speech and his series of executive actions. Meanwhile, other key economic highlights this week include (i) BoJ interest rate decision, (ii) initial jobless claims in the US and also (iii) crude oil inventories. In the commodities market, Brent crude oil broke below the USD81 mark, while gold price continued to hover around the USD2,700 level. Trump's supportive stance towards cryptocurrency had also led Bitcoin to an all-time-high at USD109k. Meanwhile, CPO prices traded flat around the RM4,200 level.

Sector Focus: With Malaysia heading the ASEAN chair, we remain positive about the Renewable Energy and Tourism sectors. Although the Energy sector could see continued strength due to Russian oil sanctions and declining crude oil inventories data last week, the optimism may fade as Donald Trump planned to increase the US oil production, thus limiting the upside potential of crude oil price. Meanwhile, the ongoing tariffs on China's products, which could weaken China's economy, are likely to reduce global oil demand.

FBMKLCI Technical Outlook

Although FBMKLCI continued to rebound yesterday, it is still trading below all the MA lines. The technical indicators are also showing mixed signals, with RSI rebounded off the oversold zone, while MACD Histogram trading at its negative territory. Resistance is anticipated around 1,587-1,592, while support is set at 1,552-1,557.

Company Briefs

A consortium led by Khazanah Nasional Bhd is revising the terms for its takeover offer for Malaysia Airports Holdings Bhd (AIRPORT) to lower the acceptance conditions to at least 85%. The offer price of RM11 per share, as well as all other terms and conditions of the offer, remained unchanged. The revisions came as the consortium secured acceptance of 86.51%, below the initial rate of 90% required for the offer to become valid, following several extensions. The consortium - which also includes the Employees Provident Fund, Abu Dhabi Investment Authority and Global Infrastructure Partners - said it "shortly expects to declare the offer unconditional and remains confident that total acceptances will exceed 90%". (The Edge)

Fajarbaru Builder Group Bhd (FAJAR) has signed the master purchase and development agreement with Penang Development Corp (PDC) for the first phase of the Penang Medi-City project in Batu Kawan. As part of the agreement, Fajarbaru Builder will acquire Parcel 1 of the project, measuring 51.2 acres, for RM111.5m, to be funded through a mix of bank borrowings and internally generated funds. The development of Parcel 1 is projected to have a gross development value of RM2bn over eight years. A profit-sharing arrangement has also been established, ensuring that PDC will receive RM36.8m over the same period. Fajarbaru Builder also entered into strategic collaborations with various partners to enhance the project's impact, including Pelaburan Hartanah Bhd (PHB), Solarvest Holdings Bhd (SLVEST), KJTS Group Bhd (KJTS), and Cellaax Sdn Bhd. PHB will explore the development of facilities such as an international school and additional healthcare infrastructure, while Solarvest will provide renewable energy solutions to promote sustainability. KJTS will implement a district cooling system designed for efficiency, while Cellaax will establish a stem cell facility to enhance the medical hub's ecosystem. (The Edge)

Convenience store chain operator 7-Eleven Malaysia Holdings Bhd (SEM), in which Berjaya Group founder Tan Sri Vincent Tan owns a 28.07% stake, is setting up 100 original cash recycling machines (CRM) at its outlets across Malaysia. The CRMs - offering cheque deposit machines and automated teller machines services - are deployed by Reachful Malaysia Sdn Bhd (formerly known as Abadi Tambah Mulia Internasional Malaysia Sdn Bhd). Reachful is a joint venture company of Japan- based Seven Bank Ltd (50.1%), 7-Eleven Malaysia's unit 7-Eleven Services Sdn Bhd (24.9%), HQZ Credit Sdn Bhd (20%) and SMRT Holdings Bhd (SMRT) (5%). HQZ Credit is 99.99%-owned by Tan. (The Edge)

Datasonic Group Bhd (DSONIC) has received one-year extensions for its contracts to supply Malaysian passports and polycarbonate biodata pages to the Immigration Department of Malaysia. The extensions came with additional contract ceilings of RM57.15m for the passport supply contract, and RM93.3m for the polycarbonate biodata pages supply contract. The extensions for both contracts are effective from Dec 1, 2024 to Nov 30, 2025. These are the contracts' fourth extensions awarded by the Home Ministry. (The Edge)

A vehicle linked to Scanwolf Corp Bhd (SCNWOLF) managing director Eddy Seah Ley Hong has triggered a mandatory takeover offer to acquire all the remaining shares it does not own in the plastic extrusion maker at 54 sen per share. The takeover offer was triggered after the offeror, Mighty Alliance Sdn Bhd, acquired a 34.38% stake or 69.81m shares in Scanwolf from its shareholders' vehicles at 54 sen apiece. The offeror said it intends to maintain Scanwolf's listing on Bursa Malaysia. Mighty Alliance is 50%-owned by Seah, 30% by Datuk Seri Bryan Wong Sze Chien, and 10% each by Datuk Seri Azlan Azmi and Datuk Seri Andrew Lim Eng Guan. The four are deemed the offer's joint ultimate offerors. The collective shareholding of the offeror, joint ultimate offerors and persons acting in concert (PACs) stands at 39.67% or 80.54m shares. (The Edge)

WTK Holdings Bhd (WTK) said a fire broke out at its unit's tape manufacturing factory in Perai, Penang, on Jan 17. The financial impact of the fire that occurred at its wholly owned Loytape Industries Sdn Bhd's manufacturing plant last Friday is still being assessed, but WTK's preliminary estimate points to the impact on its earnings not being substantial and will be mitigated by adequate insurance coverage. (The Edge)

UUE Holdings Bhd (UUE) has secured two contract renewals worth a total of RM27.5m from Sutera Utama Sdn Bhd. The first contract, valued at RM13m, involves the installation, testing and commissioning of 11kV underground cables and related accessories in Tenaga Nasional Bhd's (TENAGA) East Coast distribution network. This renewal brings the total value of the project to RM39.1m and is expected to be completed by February 2026. The second contract, worth RM14.5m, covers similar works in the southern region of Malaysia. This renewal increases the total value of the project to RM43.6m, with completion slated for December 2025. (The Edge)

SkyWorld Development Bhd (SKYWLD) has proposed to diversify into manufacturing prefabricated and prefinished modular systems, which it plans to employ in its affordable housing project in Penang. The new business, which the group says could potentially contribute a quarter of its net profit, will be undertaken via a collaboration with Singapore-based prefabricated and prefinished modular systems maker Teambuild Holdings (S) Pte Ltd. It plans to use prefabricated and prefinished volumetric construction technology to support its affordable housing development project with Penang Development Corp and PDC Properties Sdn Bhd, announced back in December last year. The joint development is expected to commence in the second half of 2025 and span 10-15 year period with a gross development value of RM13bn. (The Edge)

Mieco Chipboard Bhd (MIECO) is disposing of two pieces of industrial land in Kuantan, Pahang, for RM40m to transportation company G-Force Sdn Bhd, in a bid to reduce fixed overhead costs and improve production efficiency. The disposal will result in an estimated net loss of RM2.45m. The properties, comprising two pieces of leasehold industrial land in Kawasan Perindustrian Gebeng, have a combined land area of about 17.76 hectares and a built-up area of 638,767 sq ft, comprising factory, warehouse, and ancillary buildings ranging in age from eight to 30 years. (The Edge)

Maxland Bhd's (MAXLAND) wholly owned units Maxland Energy Sdn Bhd and Maxland Real Sdn Bhd have inked a formal deal to collaborate with data processing services provider GDC Data Sdn Bhd to jointly venture into data centre development in Kulim, Kedah. Under the deal, GDC Data will acquire a 49% stake in Maxland Real, which is to serve as the joint-venture company for the collaboration. Maxland said the partnership aims to establish a state-of-the-art data centre in the Kulim High- Tech Park, leveraging GDC Data's expertise in digital infrastructure services and role as a sourcing offtaker. (The Edge)

Source: PublicInvest Research - 21 Jan 2025