The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.
0212 GMT - Capital A may face higher jet fuel costs amid rising geopolitical tensions in the Middle East, Maybank IB analyst Yin Shao Yang says in a note. Jet fuel spot prices have remained close to his projected figure of $105 per barrel at present, hovering at $104/bbl, he notes. However, he expects that for every $1/bbl increase in jet fuel price, that would widen or trim his estimate for Capital A's core net loss or profit by about MYR50 million and his sum-of-parts target price would decrease by MYR0.03. He thinks Capital A may pass on the higher fuel costs to passengers without affecting load factor too much, given limited competition. Maybank maintains a buy rating on Capital A and keeps its target price at MYR0.94. Shares are 0.7% higher at MYR0.68. (yingxian.wong@wsj.com)
0204 GMT - Zip can keep positively surprising the market over coming quarters thanks to growth initiatives such as the Australian buy-now-pay-later provider's account product, Ord Minnett analyst Phillip Chippindale tells clients. He sees upside potential from the Zip Plus product, which is aimed at higher-value purchases and charges a monthly fee on outstanding balances. Chippindale writes in a note that he also sees potential for further scale benefits, with Zip having cut net debt, improved cash flows and steadily reduced the overhang from its convertible notes. Ord Minnett raises its target price 44% to A$1.55 and keeps a buy rating on the stock, which is down 2.3% at A$1.1575. (stuart.condie@wsj.com)
0200 GMT - Hong Kong's Hang Seng Index edges up 0.1% to 16261.76, tracking U.S. futures higher. Markets are digesting U.S. Fed Powell's comments dialing back rate-cut expectations, as well as the mixed economic data out of China on Tuesday. Among advancers, Wharf REIT gains 2.6%, AIA rises 2.4% and Longfor Group is 1.8% higher. Meanwhile, Galaxy Entertainment sheds 3.5%, Sands China falls 3.1% and NetEase is 2.5% lower. (kimberley.kao@wsj.com)
0152 GMT - Zip's existing customers are likely to be the biggest driver of transaction-value growth on the Australian buy-now-pay-later provider's platform, UBS analyst Lucy Huang writes in a note. Huang tells clients that Zip's continuing pivot toward higher-value goods such as electronics and vehicles supports her view that the company can keep increasing average annual growth in total transaction volume by 31% through fiscal 2026. Zip's 49% growth in 3Q Americas transaction volume came despite a 1.7% fall in active customers in the region. UBS lifts the stock's target price 8.4% to A$1.55 and keeps its buy rating. Shares are down 2.5% at A$1.155. (stuart.condie@wsj.com)
0152 GMT - Rising demand for electricity to power data centers and AI-related applications bodes well for Tenaga Nasional's profitability long-term, Affin Hwang IB analyst Isaac Chow says in a note. The Malaysian utility company expects to connect nine data-center projects with a total energy demand of 700MW this year, and reckons that maximum electricity demand from data centers will exceed 5,000MW by 2035, he notes. The increasing number of data-center projects may also benefit Tenaga's fiber connectivity and rooftop solar business, he adds. However, Tenaga may need to invest further in its power infrastructure to meet the anticipated surge in demand, he notes. Affin Hwang maintains a buy rating on Tenaga with a MYR12.80 target. Shares are 0.5% lower at MYR11.42. (yingxian.wong@wsj.com)
0145 GMT - Chinese shares open higher as gains in the tech and semiconductor sectors more than offset weakness in energy and banking stocks. Beijing Kingsoft Office gains 1.1% and Will Semiconductor advances 1.3%. Bank stocks are broadly lower after Fitch Ratings downgraded the outlook for six Chinese state-owned banks amid concerns about the government's ability to support the sector in the event of stress. Industrial & Commercial Bank of China drops 0.9% and Bank of China sheds 1.7%. Energy stocks fall after Iran's much-anticipated aerial attack had little effect on oil supplies. PetroChina loses 2.1%. The benchmark Shanghai Composite Index is 0.2% higher at 3014.46. The Shenzhen Composite Index rises 1.7%; the ChiNext Price Index is up by 1.1%. (sherry.qin@wsj.com)
0136 GMT - Singapore Airlines' shares may extend their recent decline, based on the technical chart, says Zane Aw, an analyst at Phillip Securities Research, in a commentary. The shares have broken out of a bearish-flag consolidation pattern to the downside following a series of lower highs, which is a bearish signal, the analyst says. Moving average convergence divergence and relative strength index indicators also support this bearish view, with fresh bearish crossover on MACD and decreasing momentum, the analyst says. The shares are likely to head lower to retest S$6.00, a prior horizontal support level seen in November, the analyst adds. SIA's shares are 0.5% higher at S$6.25. (ronnie.harui@wsj.com)
0126 GMT - Net interest margins of Malaysian traditional banks may be under pressure with their deposits facing competition from digital banks, UOB Kay Hian analyst Keith Wee Teck Keong says in a note. The Grab-led digital bank GX Bank has set the bar high for deposit rates, which could keep deposit competition elevated. The banking sector is trading at its historical mean price-to-book ratio of 1.10X, which he considers fair, given the lack of significant catalysts. The sector's projected earnings growth of 6% this year may lag the 11% increase forecast for the KLCI, he adds. UOB KH maintains a market weight rating on the sector and pegs CIMB Group as its preferred pick. (yingxian.wong@wsj.com)
0121 GMT - Singapore's FTSE Straits Times Index edges 0.2% higher at 3151.04 in morning trade, in a possible technical recovery after the benchmark index fell for the past four sessions. However, gains could be limited following data released earlier today that showed the city-state's March non-oil domestic exports dropped by more than expected. Among the best performers on the STI, Thai Beverage rises 1.0%, Jardine Matheson Holdings is up 1.1% and Sembcorp Industries adds 0.6%. Meanwhile, top decliners include Yangzijiang Shipbuilding, which falls 1.7%, and Wilmar International, which is down 0.6%. (amanda.lee@wsj.com)
0108 GMT - Malaysia's benchmark Kuala Lumpur Composite Index is 0.2% higher at 1537.67. Malacca Securities reckons selling pressure in the local bourse was likely overdone. Long-term investors may consider exploring defensive sectors like consumer, the brokerage says in a note. It pegs the KLCI's support in the range 1515-1520 and resistance in the range 1550-1555. Among gainers, Axiata Group adds 2.4% and Mr. D.I.Y. Group is up 1.3%. Meanwhile, CelcomDigi is down 0.7% and Hong Leong Bank is 0.5% lower. (yingxian.wong@wsj.com)
0100 GMT - Pantoro could become a takeover target, says Euroz Hartleys, as a record gold price gives producers more firepower for deals. Pantoro achieved a key milestone in March with positive free cash flow of A$6.9 million, reducing risk around the stock. The company said its key Norseman project had operated with positive cash flow in February as well. "The Norseman Gold project still has M&A appeal in our view, as many cashed up mid tier producers in Western Australia lack organic growth options," analyst Michael Scantlebury says in a note. M&A appetite was highlighted by the proposed combination of Westgold and Karora Resources, announced last week. (david.winning@wsj.com; @dwinningWSJ)
0053 GMT - Evolution Mining needs record gold production of some 245,000 oz in 4Q, or 32% above 3Q, to achieve the bottom end of annual guidance, says Jefferies. "While theoretically possible given the ramp-up of Cowal underground, the path is fraught with risk and likely creates an airpocket in 1Q of FY 2025," analyst Mitch Ryan says in a note. Evolution today pegged FY 2024 output guidance at 749,000 oz of gold at an all-in sustaining cost of A$1,410/oz. "It requires heroic assumptions from most assets, and an unplanned event at any asset will be enough to fall below guidance ranges," says Jefferies, which projects an output of 703,000 oz at an AISC of A$1,544/oz. (david.winning@wsj.com; @dwinningWSJ)
(END) Dow Jones Newswires
April 16, 2024 22:12 ET (02:12 GMT)
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