Softer Trading Activities Ahead Of The Holiday

Market Review

Malaysia: Following the KLCI index rebalancing activities, the FBMKLCI (+0.30%) rebounded and closed higher at 1,596.20 points, led by the banking heavyweights. The Financial Services (+0.83%) sector was the best performer of the day, while the Construction (-1.38%) sector recorded the largest decline.

Global markets: Wall Street began the holiday week on a positive note, with tech stocks led the advancement. Similarly, both the European and Asian markets also ended higher, with investors are now looking out for any official announcement of a merger between Japanese automakers Honda Motor and Nissan Motor.

The Day Ahead

The local bourse closed higher following the index rebalancing activities, with buying interest observed across the banking heavyweights during the ongoing window- dressing period, lifting the index. In the US, Wall Street kicked off the holiday- shortened trading week on a bullish tone, with the "Magnificent Seven" rally boosting the market higher. However, as several major markets including the US, UK and Hong Kong will close early today in anticipation of Christmas Holiday and the early closures may potentially lead to subdued market activities. In the commodities market, Brent crude oil continued to hover below the USD73 level. Meanwhile, gold prices ended flat around USD2,610-2,620 and CPO prices finally rebounded above RM4,500.

Sector Focus: As we approach year-end, we expect window dressing activities to persist within the Banking sector, lifting the key index. Meanwhile, the submission of CAPITALA's regularisation plan could heighten trading activities in CAPITALA and AAX, as the company plans to exit PN17 status by 1Q25. Lastly, we remain optimistic about the data centre value chain industries within the Construction, Building Material, Technology and Utilities sectors.

FBMKLCI Technical Outlook

Despite the rebound in FBMKLCI, the index is still trading below the 1,600 mark. The MACD histogram is trading at the negative territory, while RSI is also trending below 50, suggesting negative momentum at this current juncture. Resistance is anticipated around 1,611-1,616, and support is set at 1,576-1,581.

Company Briefs

KLCC (Holdings) Sdn Bhd, a unit of national oil and gas company Petroliam Nasional Bhd (Petronas) has acquired 486 acres of Bandar Malaysia land for an undisclosed price. A sale and purchase agreement for the close to 200-hectare land, the site of the former Royal Malaysian Air Force base on Jalan Sungai Besi, Kuala Lumpur, was signed with Bandar Malaysia Sdn Bhd and Bandar Malaysia Land Sdn Bhd on Oct 4. The transaction had not been previously disclosed. KLCC Holdings is the parent company of KLCC Stapled Group (KLCC) controlling 64.67% stake. The statement follows a report by The Edge Malaysia weekly in its Dec 23-29, 2024 issue that Bandar Malaysia land is being taken over by one of Petronas' companies in a deal estimated to be worth as much as RM12bn. (The Edge)

Tuju Setia Bhd (TJSETIA) has secured a contract worth RM389m to build serviced apartments in Wangsa Maju, Setapak. The job was awarded to Tuju Setia's wholly owned Pembinaan Tuju Setia Sdn Bhd by Beverly WM Sdn Bhd. Milla Residence is a joint effort between Beverly, Mapletree Investments Pte Ltd of Singapore, and Lai Sun Group of Hong Kong. Works will start in April 2025 and be completed within 36 months. (The Edge)

Oil and gas services provider Coastal Contracts Bhd (COASTAL) said a consortium led by the group has secured the bid to develop a 15MWac large-scale solar photovoltaic (PV) plant on Sabah's east coast. Coastal Contracts' wholly owned subsidiary, Coastal Power Holdings Sdn Bhd (CPHSB), holds a 90% stake in the consortium, with the remaining 10% held equally by Pleasant Engineering Sdn Bhd (PESB) and Bina HT Sdn Bhd (BHSB). Coastal Solar Sdn Bhd, another wholly owned subsidiary of the group, will serve as the special purpose vehicle to execute the project. (The Edge)

Electrical products manufacturer Powerwell Holdings Bhd (PWRWELL) has secured a RM27m contract to supply low-voltage switchboards for a data centre project in Malaysia. The contract was awarded to its wholly owned subsidiary Kejuruteraan Powerwell Sdn Bhd by "a leading international contractor". (The Edge)

KL-Kuala Selangor Expressway Bhd (Latar), previously known as Lebuhraya Assamjawa Taman Rimba Bhd, has initiated legal action to enforce an arbitration award totalling RM46.13m against highway concessionaire Prolintas Expressway Sdn Bhd, a subsidiary of Prolintas Infra Business Trust (PLINTAS). The arbitration pertains to a dispute concerning a cost-sharing agreement, involving a plan to link the Guthrie Corridor Expressway with Latar via the Kuang System Interchange and the North South Expressway (NSE) to enable vehicles on the two expressways to move freely into NSE. (The Edge)

Malayan Flour Mills Bhd's (MFLOUR) said its partially-owned unit, Dindings Poultry Development Centre Sdn Bhd (DPDC), is seeking a judicial review of the Competition Appeal Tribunal's decision to reject its request for a stay on a RM70.02m penalty imposed by the Malaysia Competition Commission (MyCC) over alleged price-fixing cartel activities. MFlour said DPDC is also seeking a stay order to halt the enforcement of MyCC's decision. The High Court has scheduled the hearing for DPDC's leave application for Jan 2. (The Edge)

Power and water company Malakoff Corp Bhd (MALAKOF) has redesignated its executive vice-chairman Tan Sri Che Khalib Mohamad Noh as non-independent non- executive chairman, effective from January 2025. Che Khalib, 59, will replace Tan Sri Dr Ahmad Tajuddin Ali, who will step down from the chairman's position after completing his three-year term. Che Khalib is currently the group managing director of MMC Corp Bhd, and previously served in the power industry as the president and CEO of Tenaga Nasional Bhd (TENAGA), a position he held for eight years from 2004. (The Edge)

HeiTech Padu Bhd (HTPADU) said its group managing director (MD) and group chief executive officer, Salmi Nadia Mohd Hilmey, is resigning voluntarily from all positions within the company, effective from Dec 31. Notably, Salmi had been in the MD position for just over eight months, after being appointed to the position on April 3. This decision follows a mutual separation agreement between Salmi and HeiTech, as she intends to pursue other opportunities and interests. (The Edge)

Supercomnet Technologies Bhd (SCOMNET) said its managing director, James Shiue Jong-Zone, has been redesignated as the company's executive director. Meanwhile, his son, Kevin Hsueh Chih-Yu, has been redesignated from executive director to managing director. The changes take effect immediately. (The Edge)

ECM Libra Group Bhd's (ECM) 50%-owned unit OHG Services Sdn Bhd will pay Malaysia Airports (Sepang) Sdn Bhd RM29.9m to extend its concession agreement to manage and operate a 'limited-service hotel' at the Kuala Lumpur International Airport (KLIA) for another 35 years. Pursuant to the extension via a supplemental agreement with Malaysia Airports (Sepang), the expiry date of the concession will move from Jan 31, 2034, to Feb 11, 2069. According to ECM Libra's annual report, OHG Services holds the concession to manage and operate the Tune Hotel KLIA2, and undertakes food and beverage operations in the same hotel. (The Edge)

Esthetics International Group Bhd (EIG) has renewed its distribution agreement with US-based premium skincare provider Dermalogica Inc. Specifically, the group has extended the distributorships for its Malaysian, Singapore, Indonesian and Brunei operations for another five years, while its distributorships in Thailand and Hong Kong have been extended for another two years. The new distributorship agreements are effective from Jan 1, 2025. (The Edge)

Source: PublicInvest Research - 24 Dec 2024