Market Review

The FBM KLCI ended its six-day losing streak, closed higher at 1,660.4 (+0.5%), driven by bargain hunters and boosted by positive sentiment across major Asian markets. Among the index constituents, the top
gainers include AXIATA (+4.1%), CIMB (+2.5%) and IHH (+2.1%). The top-performing sectors include Financial Services (+1%), Plantation (+0.9%) and Health Care (+0.7%). The overall broader market breadth
turned better but remained slightly negative, with 501 losers outpacing 479 gainers.

Economics

OPEC: Lowers 2024, 2025 global oil demand growth view

On Tuesday, OPEC in a monthly report said world oil demand will rise by 2m barrels per day (bpd) in 2024, down from growth of 2.1m bpd it expected last month. China accounted for the bulk of the downgrade, as OPEC trimmed its forecast of Chinese growth to 650,000 bpd in 2024 from 700,000 bpd. Oil use in the world's second largest economy was facing headwinds from economic challenges and moves to cleaner fuels, OPEC said. OPEC also cut its 2025 global demand growth estimate to 1.74 million bpd from 1.78 million bpd. (Reuters)

Malaysia: Get RM4bn in potential halal industry investments from China — Ahmad Zahid

Malaysia will benefit from potential new investments in the halal industry from China, worth RM4bn, said Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi. He said the huge investment potential was a result of his and the Malaysian delegation’s meetings with Chinese halal industry players on Tuesday, in conjunction with the Malaysia-China Halal Business Forum here. He said the investments cover various sectors, including herbal medicine, food and beverages, vaccines, cosmetics and pharmaceuticals. Ahmad Zahid said that in a meeting with the Asian Development Investment Bank from China, it was found that those who are ready to offer investment funding at the initial stage amounted to US$500m (RM2.2bn). (Bernama)

Japan: BOJ said to see little need to hike key rate next week

Bank of Japan (BOJ) officials see little need to raise the benchmark rate when board members gather next week, as they are still monitoring lingering volatility in financial markets and the impact of the July hike, according to people familiar with the matter. The BOJ is likely to keep borrowing costs unchanged at 0.25% at the Sept 20 conclusion of its two-day gathering, according to the people. The bank needs to carefully monitor financial markets given recent ructions that include the Nikkei 225’s biggest plunge in history on Aug 5, just days after the central bank raised its rate, the people said. (Bloomberg)

EU: Lower proposed tariffs on Teslas and other EVs from China

The European Union is poised to make small downward adjustments to the additional tariff rates proposed for electric vehicles that Tesla Inc and other carmakers import from China, according to people familiar with the matter. Tesla’s proposed rate will be revised to just below 8%, from 9%, said the people, who spoke on condition of anonymity because the changes have not yet been announced. The EU is making the revisions due to new information that companies have provided, the people said. Member states are set to vote on the proposed definitive tariffs before they’re due to come into force in November. The additional levies will be on top of the existing 10% duties that exporters from China are already subject to. (Bloomberg)

Malaysia: IPI expands 5.3% in July, driven by strong manufacturing output — DOSM

Malaysia’s industrial production index (IPI) expanded by 5.3% in July 2024, following 5% growth in the previous month driven by a surge in manufacturing output, said the Department of Statistics Malaysia (DOSM). In a statement on Tuesday, chief statistician Datuk Seri Dr Mohd Uzir Mahidin said manufacturing output rose by 7.7% in July 2024 compared to 5.2% in the preceding month and electricity output increased by 7% compared to 3.5% in June 2024. “In comparison with the preceding month, the IPI dropped 1.5% from 4.8% growth in the previous month,” he said. Year-on-year, the DOSM said the expansion of export- orientated industries mirrored the performance of the country’s manufactured goods exports, which rose by 10.6% in July 2024. “However, on a month-on-month basis, the export-orientated industries declined by 3.3%, compared to 11.8% growth in June 2024,” it added. On another note, Mohd Uzir highlighted that for the first seven months of 2024, the IPI increased by 4.1% compared to 1.1% in the previous corresponding period. (Bernama)

Companies

Genting Malaysia: Resorts World Genting to sign five MOUs worth RM12m at inaugural Genting SustainBiz F&B Expo

Resorts World Genting (RWG), owned and operated by Genting Malaysia Bhd, is set to sign a total of five MOUs worth RM12m at its first sustainability-focused exhibition, Genting SustainBiz F&B Expo at Genting International Convention Centre. The Genting SustainBiz F&B Expo, which commenced on Tuesday until Thursday (Sept 12), kicked off with the signing of the first MOU with Nestle (Malaysia) Bhd for the supply of Harvest Gourmet plant-based products for meetings, incentives, conferences, and exhibitions (MICE) events and food and beverage (F&B) outlets. This was followed by another MOU signed with Fraser & Neave Holdings Bhd to explore the use of 100% recyclable packaging natural mineral water by Tetra Pak to reduce the dependence on plastic and single-use bottles at the resort.

RWG also inked a third MOU with PNH Malaysia Sdn Bhd that focuses on upcycling food waste and transforming it from carbon powder into hotel amenities such as toothbrushes, hair combs and cutleries for use at the resort. In the following days of the expo, RWG will undertake the signing of another two MOUs with Farm Fresh Bhd and poultry player Aqina Farm. The MOU between RWG and Farm Fresh is expected to centre upon the undertaking of a joint marketing campaign to promote nutritional awareness and healthy living at the resort whilst RWG’s agreement with Aqina Farm will explore the purchase of pineapples cultivated by B40 farmers. (The Edge)

Chin Hin Group Property: Jointly undertake high-rise project in JB with Atlan

Chin Hin Group Property Bhd is partnering with duty-free retailer Atlan Holdings Bhd to jointly undertake a high-rise project in Johor Bahru, with an estimated gross development value of RM478.4m. Under the deal, Atlan will be entitled to 18% of the project's net saleable area, as its indirect subsidiary Kelana Megah Sdn Bhd is the beneficial owner of the land during a 99-year leasehold period ending in 2120. The project's development cost is estimated at RM406.4m, which will be funded by Chin Hin Group Property using proceeds from the sales of the parcel units, bank borrowings and internally generated funds. Work is expected to commence in the third quarter of next year and is targeted to be completed by the third quarter of 2029. (The Edge)

HE Group: Secures RM30.6m power station contract in Ulu Klang

HE Group Bhd has secured a contract worth RM30.6m to build a 132kV power station for a proposed semiconductor manufacturing plant in the Ulu Klang Free Trade Zone. HE Group did not specify the customer, only saying the contract was awarded by an "engineering, procurement, and construction contractor". (The Edge)

ITMAX: Executive director offloads 6% stake for RM201m, ceases to be substantial shareholder

ITMAX System Bhd’s non-independent executive director Datin Afinaliza Zainal Abidin has ceased to be a substantial shareholder of the smart city integrated system solution provider after disposing of 61.9m shares. Afinaliza, through her private vehicle Ganda Sensasi Sdn Bhd, sold the block of shares in off- market transactions on Sept 6 for over RM201.1m, according to ITMAX's bourse filing on Tuesday. The identity of the buyer was not disclosed. A check on Bloomberg showed that the shares were transacted in eight blocks at RM3.25 apiece. This is a discount of 1.81% compared to the stock's closing price of RM3.31 on Sept 6. The disposal reduced Afinaliza's stake in ITMAX to 4.58%, below the 5% threshold required for substantial shareholding status, down from 10.6%. (The Edge)

Dataprep: Teams up with a Japan-based firm for ICT collaboration

Dataprep Holdings Bhd is collaborating with Neoreka Asia Sdn Bhd, a subsidiary of NEOJAPAN Inc, a Tokyo-listed firm, as strategic partners in information and communications technology. According to the filing, the collaboration includes the appointment of Dataprep as an authorised reseller of DESKNET’s NEO, a web-based groupware platform designed to serve as the information sharing foundation for enterprises. The collaboration shall effective for three years, starting Sept 10, 2024. (The Edge)

Globetronics: Plummets as auditor resigns, dragging new shareholder APB into RM102m paper loss

Globetronics' shares, which were actively traded on Tuesday, fell 26 sen or 32.5% to close at 54 sen after announcing that its external auditor KPMG PLT had resigned "on a voluntary basis". In a statement after market close, Globetronics said KPMG's voluntary resignation as auditors of the company was in line with the group's "new strategic direction, influenced by newly emerged shareholders and management." "We extend our gratitude to KPMG for their long service and look forward to maintaining a positive relationship as we transition. It is important to note that the financial reports so far have not been audited by KPMG for this year, ensuring there is no impact on our financial integrity from this transition," Globetronics said. In the meantime, Globetronics has shortlisted audit firm UHY Malaysia as its new auditor, pending the completion of official documentation to formalise the appointment, the company said. (The Edge)

Land & General: Launch RM2.4bn GDV township project in Shah Alam next year

Land & General Bhd plans to launch U10 Aria Rimba, a new township project in Shah Alam with a total gross development value (GDV) of approximately RM2.4bn, next year. Managing director Low Gay Teck said the project will be developed in six phases. Speaking to reporters during a press conference after the company's 61st annual general meeting, he said Phase 1, set to kick off next year, entails the construction of 150 units of terrace houses with an estimated GDV of RM113m. Low said the group also plans to launch 1,008 units of high-rise service apartments in Sri Damansara Club with an estimated GDV of RM621m in 2025. Additionally, the group targets to launch 602 units of affordable service apartments, Kamelia @ Bandar Sri Damansara, with an estimated GDV of RM156m by the end of this year. (The Edge)

Press Metal: 3% of smelting capacity affected by fire incident

Press Metal Aluminium Holdings Bhd said a fire incident occurred at its Phase 3 smelter in the Samalaju Industrial Park on Monday (Sept 9) night. “Approximately 9% of our total smelting capacity (across Samalaju and Mukah) was impacted,” it said. “We estimate that it will take approximately four months to restore operations of the damaged pots,” Press Metal said. “Hence, on a full-year basis, this impacts about 3% of our annual smelting capacity. The affected assets are adequately covered by insurance,” the firm added. Press Metal said the fire affected 100 of 300 pots in the phase 3 smelter, while Phases 1 and 2 were unaffected. (The Edge)

Source: Mercury Securities Research - 11 Sep 2024