Bullish Tone On Bursa Exchange Could Prevail

Market Review

Malaysia: The FBM KLCI (+1.09%) ended firmly higher above the 1,600 level as it was lifted by buying pressure in the YTL-related heavyweights; more than 86% of the KLCI heavyweights ended on a positive note. The Construction sector was the best performing sector amid the persisting data center catalysts.

Global markets: Wall Street ended higher led by Nasdaq, supported by the gains of heavyweights Tech stocks like Tesla and Nvidia as jobs data pointing to a softening economy raised investors’ hope for an earlier rate cut by the Fed. Meanwhile, the European and Asia stock market ended higher.

The Day Ahead

The FBM KLCI charged higher after a decent consolidation below 1600 last week, while the FBM70 marched towards a 52-week high led by the construction sector. Over in the US, led by the Technology heavyweights, both the S&P500 and Nasdaq ended at all-time high zone as private-sector employment came in below expectation and the market could be pricing in earlier rate cuts by the Fed this year. Meanwhile, the FOMC meeting minutes still provide the same narrative on inflation direction and data dependent monetary policies going forward. On the commodity markets, Brent oil traded above USD87/bbl, while the gold price gained momentum above uUSD2350, pricing in softer dollar. The CPO rose nearer to RM4100.

Sectors focus: Given the US Tech giants are regaining traction, we believe the buying interest may spillover towards our local Technology stocks. Data center growth and the potential KL-SG high-speed rail announcement will be fuelling investor interest in the Construction, Property, Building Materials, and Renewable Energy sectors. In view of a weaker USD environment, traders may take the opportunity to look at commodities sector such as O&G, Gold and Plantation as their underlying prices have trended higher overnight.

FBMKLCI Technical Outlook

The FBM KLCI index ended higher towards 1,615 level, firmly above the significant 1,600 psychological level. The technical readings on the key index were positive with the MACD histogram forming positive bars and RSI surged above 50. The resistance is envisaged around 1,630-1,635 and the support is set at 1,595-1,600.

Company Brief

Mah Sing Group Bhd (MAHSING) is acquiring land in Taman Desa, Kuala Lumpur for RM108m which will be developed into serviced apartments and affordable housing units. The planned development is estimated to have a gross development value of RM1.01b. Mah Sing plans to develop the land in two phases, the first being 1,600 serviced apartments spread over 3.7 acres dubbed M Aspira and the second phase, Residensi Madani, under the affordable housing programme, will offer around 800 units on a 2.47-acre plot. (The Edge)

Construction outfit Siab Holdings Bhd (SIAB) has bagged a RM176.18m contract from property developer Exsim Noordin Sdn Bhd to build a heritage building and a 29-storey serviced apartment building in George Town, Penang. The 30-month project entails the addition of seven units to the existing four of a two-storey heritage building, and the conversion of two units from residential to commercial, as well as the construction of a 29-storey serviced apartment building in George Town, Penang. (The Edge)

Property developer Naim Holdings Bhd (NAIM) is disposing of an 180.8-hectare mixed-zone vacant land by its wholly-owned subsidiary, Naim Land Sdn Bhd, in Samarahan, Sarawak, to Onlyee Flora Sdn Bhd for RM223.38m. The transaction price represents a 4% premium over the current market value of RM215m, as appraised by independent valuer VPC Alliance (Sarawak) Sdn Bhd. Onlyee Flora is primarily engaged in holding companies and growing of oil palm estate, with its base in Kuching, Sarawak. (The Edge)

Automation solution provider Greatech Technology Bhd (GREATEC) has proposed a one-for-one bonus issue, entailing the issuance of up to 1.25b new shares. The entitlement date will be determined after all relevant approvals for the bonus issue have been obtained. For illustrative purposes, based on the three-month volume- weighted average price of the shares up to June 21, which was RM4.42, the theoretical ex-bonus share price would be RM2.21. (The Edge)

WCT Holdings Bhd (WCT), whose share price surged to a near five-year high on Wednesday, has proposed to establish a real estate investment trust (REIT) comprising its retail properties, and list it on the Main Market of Bursa Malaysia. Proceeds to be raised from the REIT listing will be used to pare down borrowings and capitalise on strategic business opportunities. The company currently owns the Bukit Tinggi Shopping Centre in Klang, Paradigm Mall in Petaling Jaya and Paradigm Mall in Johor Bahru. It also owns two airport malls, namely gateway@klia2 in Sepang and SkyPark Terminal in Subang. (The Edge)

Computer Forms (Malaysia) Bhd (CFM) said a fire broke out at its factory located at the PKNS Setapak Industrial Area, off Jalan Genting Kelang, Kuala Lumpur on July 2. The cause of the fire remains unknown as investigations by the police are still ongoing, with the company adding that the incident caused no injuries. The company has yet to ascertain the full financial and operational impact due to the damage caused by the fire. The group will render its full assistance to the investigation into the cause and source of the fire. (The Edge)

PLUS Malaysia Bhd and Petronas Dagangan Bhd (PETDAG) are collaborating to develop the country's first commercial hybrid stations — Hybrid Super Station — along national highways, with the Klang Valley identified as the pilot location. The partnership is expected to set a new standard for highway services in Malaysia while offering greater comfort and options to road users. Each touchpoint of the upcoming station, spanning over 30,000 sq ft, will be designed to cater to customer trends and needs. It will offer comprehensive mobility services, including large-scale petrol and diesel stations, as well as fast-charging stations for electric vehicle users, and aims to provide improved public amenities. (The Edge)

MyEG Services Bhd (MYEG) is teaming up with credit reporting agency Credit Bureau Malaysia Sdn Bhd (CBM) to offer a self-check service for individual credit reports. This will be done by integrating CBM’s MySCoRE on the MyEG portal. Similar to MyEG’s existing service with CTOS, users can now easily obtain their MySCoRE credit reports through the MyEG portal. The process, service and fees associated with obtaining a credit score report from CBM via MyEG are identical to those offered directly through the CBM website at no extra charges. (The Edge)

Source: Mplus Research - 4 Jul 2024