Previous Day Highlights

FBM KLCI closed marginally higher and many remains neutral after the reshuffling of the Cabinet ministers. The benchmark index was up 0.05% or 0.73 pts to close at 1,447.12. Gainers were seen in telecommunications (+0.91%), construction (+0.52%), and energy (+0.33%); while losers were seen in health care (-1.14%), utilities (- 0.83%), and property (-0.68%). Market breadth was negative with 483 losers against 388 gainers. Total volume stood at 3.28bn shares valued at RM2.38bn.

Major regional indices trended positive as investors anticipated a potential pause in Fed interest rates. HSI gained 1.07%, to end at 16,374.50. SHCOMP increased 0.40%, to close at 3,003.44. Nikkei 225 up 0.16%, to finish at 32,843.70. STI rose 0.39%, to close at 3,102.31.

Wall Street closed higher amid optimistic sentiment following the CPI data for November. The DJIA added 0.48%, to end at 36,577.94. Nasdaq rose 0.70%, to close at 14,533.40.S&P500 rose 0.46%, to finish at 4,643.70.

News For The Day

Bermaz's 2Q profit jumps 37% with stronger Mazda sales

Bermaz Auto reported a 37.19% YoY jump in its 2QFY4/24 net profit RM90.10m from RM65.67m, as it registered stronger revenue, along with better share of results from associates and forex gains. The group declared a second interim dividend of five sen per share, to be paid on Jan 5, 2024. This brings its total dividends declared YTD to 10 sen per share. The group's revenue grew 28.61% YoY to RM1.01bn from RM782.97m, driven by the better performance from its Mazda operations in Malaysia, with the CX-30 CKD model continuing to chart higher sales since it was unveiled in March. The increase was, however, partly set off by lower sales registered from its Peugeot marque operations during the quarter under review. -The Edge Markets

Unitrade acquires stake in metal recycling firm for RM66m

Unitrade Industries has proposed to enter the metal recycling market by acquiring a 51% stake in Intergreen Metals SB for RM66.3m, in a move aimed at complementing the group's core operations in building materials wholesaling. The acquisition comes with a guarantee that Intergreen Metals will achieve a profit after tax of RM45m over three years.-The Edge Markets

SCIB enters into MOU to develop residential project in Bintulu

Sarawak Consolidated Industries (SCIB) has entered into a memorandum of understanding (MOU) for a potential joint venture residential development project in Bintulu, Sarawak, with a projected gross development value of RM250m. The project involves the development of 50 acres of land into around 600 residential units, signifying a major undertaking in Bintulu's property development sector.-The Edge Markets

Sarawak Cable finds white knight with RM250m

Sarawak Cable (SCB), a Practice Note 17 (PN17) company, announced that it had found a white knight in Serendib Capital Ltd to undertake a “resuscitation exercise” to revive the lossmaking manufacturer. SCB that UK-based Serendib Capital had prepared a war chest of RM250m to help pare down its debts, and to recapitalise the cable manufacturer “to cater to growing customer demand for infrastructure grid development and high-voltage cables”. -The Edge Markets

Johan's 1Q net loss narrows to RM3.45m

Johan Holdings reported its 1QFY7/24 lower net loss of RM3.45m, compared with a net loss of RM4.77m YoY. Revenue rose to RM6.82m from RM3.64m YoY. Johan Holdings Bhd expects the operating environment in the glove industry to remain challenging as it expects the local tourism industry to continue showing signs of recovery. -The Star

Our Thoughts

Wall Street closed broadly firmer as the Santa Claus rally continues, aided by the latest CPI figure that came in within expectations prompting beliefs that the Feds may leave rates unchanged. As a result, the DJI Average gained 173 points while the Nasdaq added 101 points as the US 10-year yield eased marginally to 4.21%. In Hong Kong, the HSI jumped 173 points higher after touching a 14-month low, on optimism that the political and economic meeting in Beijing this week could deliver some good news in terms of stimulus to revive the Chinese economy. On the local front, the FBM KLCI ended flat as late accumulation activities helped lift the index higher amid a lacklustre session. Though we noticed bargain hunting is prevalent, overall sentiment remains cautious coupled with a neutral reaction towards the latest Cabinet reshuffle. For today, we reckon the index to scale higher taking cue from the clearer picture in the US thus expect it to hover within the 1,445-1,455 range. As for crude oil prices, the Brent slumped even further to US$73/barrel due to a combination of record US inventory plus weaker demand from China.

Source: Rakuten Research - 13 Dec 2023

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