KUALA LUMPUR, Aug 19 (Bernama) -- Bursa Malaysia ended lower on Wednesday, as elevated United States (US) Treasury yields and weakness in technology stocks weighed on investor sentiment, an analyst said. However, gains in healthcare and telecommunications stocks provided some support to the broader local market. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) eased 2.04 points, or 0.12 per cent, to 1,731.32 compared with Tuesday’s close of 1,733.36. The benchmark index opened 1.39 points weaker at 1,731.97, and fluctuated between 1,725.95 and 1,733.44 throughout the day. On the broader market, losers outpaced gainers 701 to 478, while 563 counters were unchanged, 1,131 untraded and 16 suspended. Turnover shrank to 3.31 billion units valued at RM2.92 billion from 3.74 billion units valued at RM2.91 billion on Tuesday.
Shares of Homeritz Corp Bhd (KL) surged to their highest level in six weeks following the furniture manufacturer's better-than-expected third quarter results, despite analysts maintaining a cautious outlook.
Key Highlights:
Share Performance:
- Homeritz shares rose by 3.4%, or two sen, to 60.5 sen, the highest since June 18, 2024.
- Trading volume totaled 210,900 shares at 9:20 am.
- The company’s market capitalization stood at RM280.63 million at the last price.
Analyst Ratings:
- Public Investment Bank and Hong Leong Investment Bank (HLIB) maintained ‘hold’ calls on the stock due to limited upside potential.
- Public Investment Bank raised its earnings forecast by 6%, now expecting Homeritz to make RM33.1 million in core net profit, with a target price of 61 sen.
- HLIB’s target price for Homeritz is 62 sen, noting that the current valuation is “fair,” trading close to its five-year mean of eight times forward earnings.
Market Conditions:
- Analysts remain conservative about Homeritz’s near-term trajectory due to high interest rates and persistent inflationary pressure.
- An uptick in sales volume is expected during the upcoming year-end festival season.
Potential Rate Cuts:
- Shares of Homeritz have risen nearly 18% year-to-date as investors speculate on potential rate cuts by the Federal Reserve (Fed), which could spur demand for homes in the US, a major market for Homeritz’s exports.
- HLIB noted that a potential recovery in the US housing market, driven by Fed rate cuts in the second half of 2024, could lead to higher furniture demand and benefit local furniture makers.
Financial Health:
- Homeritz’s strong balance sheet, with net cash of RM189.1 million or 40.8 sen per share, supports its share price, accounting for nearly 70% of its market capitalization.
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