Previous Day Highlights

FBM KLCI closed lower as profit taking activities emerged following the recent rally. The benchmark index was down 0.17% or 2.64 pts to close at 1,512.75. Majority of sectors closed lower with plantation (-0.7%), energy (-0.5%), and industrial products & services (-0.5%) leading the losses; while gainers were seen in utilities (+0.9%), and construction (+0.8%). Market breadth was negative with 622 losers against 383 gainers. Total volume stood at 3.78bn shares valued at RM2.64bn.

Major regional indices trended mixed amid cautious sentiment as investors weigh on China’s property woes. HSI declined 2.32%, to end at 15,703.45. SHCOMP dropped 1.83%, to close at 2,830.53. Nikkei 225 up 0.11%, to finish at 36,065.86. STI rose 0.31%, to close at 3,150.04.

Wall Street closed mixed as investors braced for a series of high-profile earnings reports and the Federal Open Market Committee (FOMC) meeting. The DJIA added 0.35%, to end at 38,467.31. Nasdaq eased 0.76%, to close at 15,509.90. S&P500 slid 0.06%, to finish at 4,924.97.

Our Thoughts

Wall Street closed mixed on the back of a mixed bag of corporate earnings and strong labour market as traders wait for the outcome from the FOMC latest meeting. As such, while the DJI Average gained 134 points, the Nasdaq lost 118 points despite the US 10-year yield continuing to slide hovering at 4.036%. In Hong Kong, the HSI declined by 374 points to end below the 16,000 level impacted by Evergrande’s liquidation order coupled with concerns on corporate earnings outlook. Back home, the FBM KLCI ended lower after a solid opening attributed to some profit taking activities and impacts from the sharp drop in Hong Kong equities. Nonetheless, we reckon this is only an intermittent correction and will not distract recent inflows of foreign funds thus recent dips offer excellent opportunities to bargain hunt. For today, we believe the index to hover within the 1,510-1,520 range with interests on the Financials and Plantation counters to persist.

News For The Day

Sunway REIT 4Q net property income falls 7%

Sunway Real Estate Investment Trust's (Sunway REIT) 4QFY12/23 net property income (NPI) decreased by 7.2% YoY to RM135.7m from RM146.2m, on higher reversal of doubtful debt provision the impact of increased Imbalance Cost Pass-Through (ICPT) electricity charges across all segments. Revenue inched up 2% YoY to RM190.5m from RM186.7m, primarily driven by the retail and hotel segments, buoyed by strong retail footfall and healthy retail sales, as well as higher tourist arrivals during festive seasons and school holidays. Sunway REIT declared a final income distribution of 4.68 sen per unit, to be paid on Feb 29, bringing its total distribution per unit for FY23 to 9.3 sen. -The Edge Markets

IGB REIT, IGB Commercial REIT net property income up in 4Q Higher rental income lifted IGB Real Estate Investment Trust’s (IGB REIT) 4QFY23 NPI by 9.08% YoY to RM115.24m from RM105.64m, as it posted a 6.6% YoY rise in revenue to RM158.47m from RM148.71m. Sister company IGB Commercial REIT logged an 4QFY23 NPI of RM32.86m, 20.51% YoY higher than the RM27.27m, as revenue increased by 15.13% to RM56.92m on higher average occupancy rate of properties. IGB REIT declared an income DPU of 2.7 sen, bringing total DPU for F23 to 10.47 sen. IGB Commercial REIT, on the other hand, announced an income DPU of 1.75 sen, raising total income distribution for FY23 to 3.49 sen. -The Edge Markets

Samaiden to build 7MW biomass power plant in Johor

Samaiden Group has received approval to construct and operate a biomass power plant in Tangkak, Johor, with an installed capacity of seven megawatts, as it aims to supply a net export capacity of six megawatts to Tenaga Nasional (TNB). This is following the Feed-in Tariff approval certificate received by the group's indirect whollyowned subsidiary Samaiden Biomass Energy SB from the Sustainable Energy Development Authority Malaysia in a letter dated Jan 22, 2024. The agreement to supply the electricity to TNB spans 21 years and is scheduled to commence on Jan 22, 2027.-The Star

Newly listed HE Group's unit bags RM34.79micontract

HE Group has won a RM34.79m contract from a semiconductor components manufacturer for a project in Kedah. HE Group said its wholly-owned subsidiary, Hexatech Engineering SB, has accepted a new work order from the customer, which is a wholly-owned subsidiary of a company listed on the Frankfurt Stock Exchange and headquartered in Munich, Germany. "The work order will commence on January 31, 2024 and is expected to be completed by April 30, 2024,” it said.-The Edge Markets

Source: Rakuten Research - 31 Jan 2024

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