KLCI falls 1% as profit-taking halts Anwar-boosted rally

TheEdge Fri, Nov 25, 2022 10:46am - 1 year View Original


KUALA LUMPUR (Nov 25): The FBM KLCI fell 1% in the mid-morning on Friday (Nov 25) as profit-taking activities erased gains from a day earlier, as the euphoria over the appointment of Datuk Seri Anwar Ibrahim as the 10th prime minister of Malaysia somewhat eased.

At 10.05am, the benchmark index had fallen 15.30 points to 1,486.58.

The top losers included Nestlé (Malaysia) Bhd, Malaysia Pacific Industries Bhd, Petronas Dagangan Bhd, PPB Group Bhd, Kuala Lumpur Kepong Bhd (KLK), Maxis Bhd, Can-One Bhd, Carlsberg Brewery Malaysia Bhd and Tenaga Nasional Bhd (TNB).

Hong Leong Investment Bank Research in a traders’ brief said despite a potential pullback due to the recent 9.3% relief rally from 1,373 points (the two-year low hit on Oct 13), the KLCI may advance further towards 1,528 (Aug 17's high) and 1,555 (the 200-day moving average) zones after Anwar was sworn in as Malaysia’s 10th PM, with the key support levels now revised to 1,468-1,482 territory.

“We like YTL Power International Bhd ('buy', with a target price of RM1.08) amid undemanding valuation (10 times price-earnings for the financial year ending June 30, 2023 or FY2023) given strong earnings recovery of Singapore's Seraya, while dividends may surprise on the upside (estimated at 6.6% for FY2023).

“The stock should gain further traction towards 70 sen-73 sen-76 sen, following a downtrend line breakout and bottoming up indicators, while support levels are situated near 64 sen-66 sen,” it said.

Meanwhile, CGS-CIMB Securities said the appointment of Anwar after five days of uncertainty following Saturday's 15th general election was positive for brewery and gaming stocks (with concerns over regulatory risks lifted).

It said expectations of political stability and growth in Malaysia could also attract foreign investors.

“We expect positive share price reactions for banking, gaming, brewery, consumer and utility stocks.

“Our end-2022 KLCI target is raised to 1,602 points,” it said.

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