KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
Shares of Notion VTec Bhd (KL) plunged nearly 29% on Friday, hitting their lowest level in three months, as investors reacted to a grim earnings outlook. The stock fell as much as 28.8% or 39.5 sen to 97.5 sen, triggering a temporary suspension of intraday short selling. By 11:25 am, the stock had partially recovered to RM1.07 but was still on track for its fifth consecutive session of decline.
Key Takeaways:
Significant Drop in Share Price: Notion VTec’s sharp decline to 97.5 sen, its lowest since May 2024, led to the highest trading volume on Bursa Malaysia at 78.42 million shares, more than seven times the 200-day moving average. The company’s market capitalization now stands at RM556.26 million.
Negative Earnings Guidance: A fund manager who attended the company’s recent investor briefing reported that Notion VTec flagged negative foreign exchange hedges that could impact earnings for the quarter ending September 2024 (4QFY2024). This outlook contributed significantly to the sharp sell-off.
Market and Trading Limitations: The decline in share price was exacerbated by bursts of trading limits on stock warehousing accounts, with certain investment banks tightening credit limits and requiring cash upfront for trading the stock. Additionally, the broader technology sector also faced pressure, with the Bursa Malaysia Technology Index down nearly 3% in line with a decline in the Nasdaq Composite overnight.
Shareholder Composition and Analyst Coverage: Notion VTec is primarily owned by retail investors, with no institutional funds among the top 30 largest shareholders. Despite the recent downturn, the company’s shares are still up nearly 240% year-to-date, driven by a strong turnaround from record losses in FY2023 and a recent surge in earnings. Two analysts covering the stock have ‘buy’ ratings, with target prices of RM3.28 (Hong Leong Investment Bank) and RM3.51 (Nomura Research).
Recent Financial Performance: Earlier this month, Notion VTec reported an 11-fold increase in net profit for the third quarter ended June 30, 2024 (3QFY2024), reaching RM20.25 million—its best quarterly earnings in six years—boosted by higher contributions from the hard disk drive and electronic manufacturing services segments.
Despite the positive financial results, the negative earnings guidance and broader market pressures have led to significant volatility in Notion VTec’s stock, raising concerns among investors about the company’s near-term outlook.
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