Review & Outlook

Stocks drifted lower on Thursday, ignoring gains in regional markets as investors remained cautious as they priced-in the potential adverse impact from new export restrictions on AI chips imposed by the US. The FBM KLCI fell 6.58 points to close at the day's low of 1,555.54, off an early high of 1,576.57, as losers beat gainers 525 to 480 on a higher turnover of 3.61bn shares worth RM3.16bn.

Looking ahead, local market sentiment should continue to be impacted by concerns regarding potential US trade policies ahead of Donald Trump's inauguration as president next week. 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 1,580, with the next hurdles at 1,605 and 1,630, followed by 1648.

Velesto needs to rebuild support at current levels to enhance recovery upside towards the 50%FR (19sen), with next upside hurdle from the 61.8%FR (22sen), while downside is cushioned by the 23.6%FR (13sen) and 10sen. Investors should look to accumulate Wasco shares on weakness towards the key 50%FR (RM1.05) or 38.2%FR (92sen) support, for recovery upside to the 76.4%FR (RM1.35) and RM1.48 ahead.

News Bites

• Malaysia's property market has entered an upcycle, driven by rising business and consumer confidence, according to the Real Estate and Housing Developers' Association Institute chairman Datuk Jeffrey Ng Tiong Lip.

• Investment management firm Vertical Theme Sdn Bhd is planning to seek approval in the coming weeks to start talks about selling its 29% stake in Alliance Bank Malaysia Bhd to DBS Group Holdings Ltd, according to Bloomberg.

• Jati Tinggi Group Bhd has won the tender for a RM25.5mn contract from Tenaga Nasional Bhd to lay underground double-circuit cables for a data centre in Selangor.

• SBH Marine Holdings Bhd plans to acquire 7.3 acres of vacant industrial land in Seberang Perai Tengah, Penang, through a court-sanctioned auction for RM18.9mn in cash.

• Tanco Holdings Bhd has proposed a bonus issue of up to 3.85bn new shares , based on seven bonus shares for every five Tanco shares held, to reward shareholders.

• Hextar Industries Bhd has announced the soft opening of five Luckin Coffee outlets by the end of January 2025.

• Sarawak Oil Palms Bhd is targeting revenue of RMB2.4mn (RM1.5mn) as its flagship product, AvantHealth Avtriee Tocotrienols, makes its debut in the Chinese market.

• Silver Ridge Holdings Bhd announced on Thursday that it has resolved a legal dispute with subcontractor Wilstech Sdn Bhd over an RM1.4mn contract payment through mediation.

• Sedania Innovator Bhd, which provides sustainable energy solutions as well as premium personal care and food supplements under the Tanamera brand, has hired Darren Choy to lead its fast-moving consumer goods business.

• Ancom Nylex Bhd reported a 31% decline in net profit for the 2QFY25 to RM15.2mn, from RM22.1mn a year earlier, on elevated freight cost and sharp foreign exchange fluctuations that affected its gross profit margin.

• TAS Offshore Bhd's 2QFY25 net profit more than doubled to RM9.4mn from RM4.5mn a year ago, driven by improved performance of its shipbuilding activities where more vessels were completed and delivered to customers during the quarter.

• China will start an investigation into whether the US dumps lower-end chips and unfairly subsidises its own chipmakers, one of Beijing's strongest retaliatory moves so far against American technology sanctions.

• Japan's annual wholesale inflation held steady at 3.8% in December on stubbornly high food costs, data showed on Thursday, highlighting persistent price pressures that may prod the central bank to raise interest rates next week.

• U.S. retail sales increased 0.4% in December, pointing to strong demand in the economy and further reinforcing the Federal Reserve's cautious approach to cutting interest rates this year.

Source: TA Research - 17 Jan 2025