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Market Daily Report: Bursa Malaysia Ends Higher In Line With Most Regional Markets

KUALA LUMPUR, Sept 20 (Bernama) -- Bursa Malaysia ended higher on Friday in line with most Asian markets, mirroring gains from Wall Street, where investors welcomed the US Federal Reserve's substantial interest rate cut. The FTSE Bursa Malaysia KLCI (FBM KLCI) rose by 3.17 points, or 0.19 per cent, to 1,668.82 at the close from Thursday's close of 1,665.65. It opened 5.03 points higher at 1,670.68, trading between 1,668.48 and 1,674.04 throughout the session. In the broader market, gainers outpaced decliners 732 to 468, while 465 counters were unchanged, 850 untraded and 32 suspended. Turnover swelled to 4.19 billion units worth RM5.97 billion, from Thursday's 3.99 billion units worth RM4.08 billion. UOB Kay Hian Wealth Advisors head of investment research, Mohd Sedek Jantan, noted the FBM KLCI's gains were led by utilities, logistics, and banking stocks, reflecting improved market sentiment. Additiona
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Notion VTec Shares Plummet Nearly 29% Amid Bleak Earnings Outlook and Market Sell-Off

 

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:

  1. 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.

  2. 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.

  3. 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.

  4. 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).

  5. 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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