Harris-Trump Debate and Inflation Data in Focus

Market Review

Malaysia: The FBM KLCI (+0.54%) rebounded despite a volatile intraday session, as banking heavyweights, namely CIMB (+21.0 sen) and PBBANK (+11.0 sen) boosted the sentiment on the local front, supported by strong foreign buying interest and robust GDP outlook in Malaysia.

Global markets: The Wall Street continues to recover led by NASDAQ, as buying activity in the EV maker, TSLA (+2.2%) lifted the sentiment despite the lack of fresh catalysts. Meanwhile, the European stock markets ended lower, while Asian stock markets were mixed, in spite of positive growth from China’s exports.

The Day Ahead

The Bursa Exchange rebounded, led by the FBM KLCI, following strong buying interest in banking heavyweights. However, the small-cap index remained in negative territory for the session. Meanwhile, U.S. stock markets ended mixed, with the Dow declining while technology stocks rebounded ahead of key inflation data, CPI and PPI—to be released tonight and tomorrow, respectively. Investors will likely keep a close watch on the developments in the Harris-Trump presidential debate, as it could provide insights into which sectors to focus on. In the commodity markets, Brent oil continued to fall, breaking below USD70 due to concerns over China’s slowing economy and growing recession fears. Gold prices surged above USD 2,500 as traders anticipated a Fed rate cut next week. Crude palm oil prices also dropped, trading below RM3,900.

Sector Focus: Despite the rebound in US technology stocks, we believe the local technology sector may face headwinds due to the strengthening ringgit. Also, GTRONIC’s auditor resignation presents a potential affect the sentiment for the sector. On the flip side, we favour sectors that benefit from a stronger ringgit, such as Consumer and Financials. We are also positive on selected Construction and Building Materials stocks, supported by the data center segment.

FBMKLCI Technical Outlook

The FBM KLCI index rebounded towards the 1,660 level. However, the technical readings on the key index were mixed with the MACD histogram forming another negative bar but the RSI trended above 50. The resistance is envisaged around 1,675- 1,680 and the support is set at 1,640-1,645.

Company Brief

National oil and gas corporation Petroliam Nasional Bhd (Petronas) has reaffirmed its commitment to resolving issues surrounding natural gas distribution in Sarawak through discussions with the state and federal governments, as well as Sarawak’s Petros. This follows a news report suggesting that Petronas might seek a court injunction to retain control over Malaysia's hydrocarbon resources. Petronas did not confirm or deny the report but emphasised the need for a win-win partnership that prioritises the country's economic stability and investment climate. (The Edge)

Globetronics Technology Bhd (GTRONIC) saw its share price plummet 32.5% or 26 sen after announcing that its external auditor, KPMG PLT, has resigned voluntarily, leading to the suspension of its intraday short-selling. APB Resources Bhd (APB), a new substantial shareholder that owns 10.36% stake in Globetronics also saw a 4.41% decline, as its investment in the contract manufacturer of semiconductor- based products faced a RM102m paper loss. (The Edge)

A consortium of KV Asia Capital Pte Ltd, Kumpulan Wang Persaraan (KWAP), and Indonesia’s Kapal Api Group has invested RM250m in Zuspresso (M) Sdn Bhd, the operator of ZUS Coffee, to support its global expansion. The funding will help ZUS Coffee grow and enter new markets, including Singapore and Brunei later this year. (The Edge)

Chin Hin Group Property Bhd (CHGP) is partnering with Atlan Holdings Bhd (ATLAN) on a high-rise project in Johor Bahru with an estimated gross development value of RM478.42m. The project will feature two blocks of serviced apartments, 1,260 residential units, 10 retail lots, and multi-storey car parks on a 4.29-acre site. Atlan will receive 18% of the project's net saleable area. (The Edge)

HE Group Bhd (HEGROUP) has secured a RM30.6m contract to build a 132kV power station for a semiconductor plant in Ulu Klang Free Trade Zone. The contract, awarded to its subsidiary Hexatech Engineering Sdn Bhd, was given by an unspecified engineering, procurement, and construction contractor. (The Edge)

Datin Afinaliza Zainal Abidin, a non-independent executive director at ITMAX System Bhd (ITMAX), has sold 61.9m shares through her private vehicle Ganda Sensasi Sdn Bhd for over RM201.1m. The sale, executed on Sept 6 at RM3.25 per share, reduced her stake from 10.6% to 4.58%, below the 5% threshold for substantial shareholders. The buyer's identity was not disclosed. (The Edge)

Property developer Land & General Bhd (L&G) plans to launch the U10 Aria Rimba township in Shah Alam next year, with a total GDV of RM2.4bn, developed in six phases. Phase 1 will include 150 terraced houses with a GDV of RM113m. The company also plans to launch 1,008 high-rise serviced apartments in Sri Damansara with a GDV of RM621m in 2025 and 602 affordable serviced apartments, Kamelia @ Bandar Sri Damansara, with a GDV of RM156m by the end of this year. (The Edge)

Press Metal Aluminium Holdings Bhd (PMETAL) reported a fire at its Phase 3 smelter in the Samalaju Industrial Park on Sept 9. The fire, which was extinguished, affected 9% of the company’s total smelting capacity. Press Metal expects it will take about four months to restore operations. (The Edge)

Calcium carbonate producer Zantat Holdings Bhd (ZANTAT), after raising RM18.2m from its March IPO, is now aiming to raise around RM14m through a special issue of up to 40m new shares to Bumiputera investors. Assuming the special issue shares are priced at 35 sen each, the funds will primarily support working capital (RM11.6m), repay bank borrowings (RM2m), and cover placement expenses (RM400,000). (The Edge)

Source: Mplus Research - 11 Sep 2024