Review & Outlook

Following last week's steep sell-off which forced short-term technical momentum indicators deep into severely oversold levels, investors should expect the FBM KLCI to rebound this week after falling to extreme oversold levels. Nonetheless, we continue to be cautious going forward, as the recent slew of trade restrictions on US technology exports announced by the outgoing Biden administration and potential for new restrictive tariff policies under the incoming Trump administration should cap upside potential in this rebound leg.

Immediate index support remains at 1,550, with stronger supports anticipated at the 6/8/24 low of 1,529 and the 1,500 psychological level. Immediate resistance is maintained at 1,580, with stronger upside hurdles seen at 1,605 and 1,630, followed by 1648.

As for stock picks this week, key construction, property and utility related blue chips and lower liners which suffered sharp selloffs last week should attract investors looking for bargain entry levels for longer-term recovery upside.

News Bites

• Malaysia's economy likely rose 4.8% YoY in the 4Q24 and 5.1% in 2024, according to the Department of Statistics Malaysia's advance estimates.

• CIMB Group Holdings Bhd announced a senior leadership restructuring effective Feb 1, 2025, including the departure of Effendy Shahul Hamid, CEO of group consumer and digital banking.

• Berjaya Corporation Bhd remains interested in the Kuala LumpurSingapore high-speed rail project, but its progress hinges on government decisions and financial considerations, said founder Tan Sri Vincent Tan.

• Mitrajaya Holdings Bhd said it has secured a RM375.5mn contract for the construction of a data centre in Kuala Lumpur from NextDC Sdn Bhd, the Malaysian unit of Australia's data centre operator NextDC Ltd.

• HeiTech Padu Bhd secured a RM28.3mn, two-year extension for maintaining the Malaysian Immigration System from Feb 18, 2025, to Feb 17, 2027, with renewals at the government's discretion.

• Datasonic Group Bhd's subsidiary won a RM6.4mn, 36-month contract from the Home Ministry to maintain the Immigration Department's facial live capture system starting Feb 25, 2025.

• Petronas Gas Bhd's unit, Regas Terminal (Pengerang) Sdn Bhd, has partnered with Dialog Equity (Three) Sdn Bhd, a Dialog Group Bhd subsidiary, to develop Malaysia's first LNG-driven air separation unit in Pengerang, Johor.

• Hong Leong Bank Bhd has signed an agreement to cooperate with WeBank Technology Services, a subsidiary of WeBank, China's largest digital bank, as it aims to raise its operational efficiency and leverage artificial intelligence.

• Betamek Bhd's subsidiary, Betamek Electronics (M) Sdn Bhd, achieved Level 5, the highest rating in the supplier competitiveness level assessment by the Malaysia Automotive Robotics and IoT Institute.

• Zecon Bhd's subsidiary, Zecon Medicare Sdn Bhd, signed a renewable energy power purchase agreement with Universiti Kebangsaan Malaysia for its first 2MW rooftop solar photovoltaic project.

• JF Technology Bhd co-founder and managing director Datuk Foong Wei Kuong bought another 14.4mn shares or an additional 5.6% stake in Cosmos Technology International Bhd from MSM International Ltd, raising his stake to 18.0%.

• Bird's nest processor MYMBN Bhd announced the Department of Veterinary Services Malaysia has lifted the nearly month-long suspension on exporting raw-cleaned and raw-uncleaned edible bird's nest products to China, a key market for the company.

• Homeritz Corporation Bhd reported a RM3.0mn loss from a fire at its Muar, Johor facility, to be reflected in 2QFY25 results.

• China's economy grew 5.4% in the 4Q24, significantly beating analysts' expectations and enabling the government to meet its annual growth target of 5.0%.

• In its latest World Economic Outlook, the IMF projected global growth of 3.3% in both 2025 and 2026, and said global headline inflation was set to drop to 4.2% in 2025 and 3.5% in 2026.

Source: TA Research - 20 Jan 2025