Previous Day Highlights

FBM KLCI closed lower amid the weak market sentiment before the long weekend break. The benchmark index was down 0.47% or 7.58 pts to close at 1,596.68. Majority of sectors were negative with energy (-2.0%), telecommunications (-1.5%), and utilities (-1.3%) leading the losses; while gainers were seen in REIT (+0.4%), and financial services (+0.2%). Market breadth was negative with 857 losers against 365 gainers. Total volume stood at 5.45bn shares valued at RM6.85bn.

Major regional indices trended mostly higher except SHCOMP which slipped 0.27%, to close at 3,078.49. HSI surged 1.79%, to end at 18,403.04. Nikkei 225 was up 1.13%, to finish at 38,923.03. STI rose 0.37%, to close at 3,348.87.

Wall Street closed mixed in a bumpy trading session, following the manufacturing data. The DJIA dropped 0.30%, to end at 38,571.03. Nasdaq rose 0.56%, to close at 16,828.67. S&P500 advanced 0.11%, to finish at 5,283.40.

News For The Day

Tenaga's net profit falls 29% in 1Q

Tenaga Nasional’s 1QFY12/24 net profit fell 28.6% YoY to RM715.7m from RM1bn due to foreign exchange translation losses and higher tax expenses. Revenue rose 8% YoY to RM13.64bn from RM12.63bn, driven by electricity demand growth of 9.9% YoY. No dividend was announced for the quarter.-The Edge Markets

CIMB Group 1Q net profit rises 18%

CIMB Group Holdings’ 1QFY12/24 net profit rose 18% YoY to RM1.94bn compared with RM1.64bn, as both interest and non- interest income grew faster than costs and provisions. Net interest income grew 7.7% YoY to RM3.79bn while non-interest income surged 24.5% YoY to RM1.84bn. No dividend was declared for the quarter. -The Edge Markets

Sime Darby Plantation's 1Q net profit triples

Sime Darby Plantation reported its 1QFY12/24 net profit tripled YoY to RM211m compared with RM69m, thanks to lower tax and strong downstream operations. Revenue rose 6.7% YoY to RM4.34bn from RM4.07bn. -The Edge Markets

AME Elite unit to acquire land in Kulai for RM106.17m

AME Elite Consortium via its wholly-owned subsidiary Golden Symphony SB has proposed to acquire three parcels of freehold land in Taman Teknologi Johor in Kulai, Johor, for a total RM106.17m cash. Its subsidiary had entered into a S&P agreement with oil palm planter Dahlia Utama SB for the land, which will be developed into an industrial cluster. AME Elite anticipates completing the acquisition in 3QCY24. -The Star

Feytech buys land for RM20m

Feytech Holdings’s (FHB) wholly-owned subsidiary, Feytech SB has proposed to acquire a 9.76 acres freehold industrial land in Perak for RM19.98m. Feytech entered into a sale and purchase agreement with Proton City Development Corporation SB for the proposed acquisition, to establish a new manufacturing facility. -The Star

I-Bhd's 1Q net profit sharply higher

I-Bhd's reported its 1QFY24 net profit rose six-fold YoY to RM4.07m from RM675,000, attributed to its "strong financial management and strategic foresight". This is despite quarterly revenue slipping 8.6% YoY to RM40.63m from RM44.46m, due to the property development segment’s revenue falling 53% YoY to RM7.99m from RM17.09m, amid clearance of existing inventory. -The Edge Markets

Our Thoughts

Wall Street closed on a mixed note following a weak US manufacturing and construction data as well as falling crude oil prices. The DJIA fell 115 points while the Nasdaq gained 94 points as Nvidia boosted tech sentiment from its next generation AI chip platform. Meanwhile, the US 10-year yield eased to 4.392%. Over in Hong Kong, the HSI added 323 points following a tame US inflation report last Friday and that China’s factory activity grew at its fastest pace over the last 2 months. The local bourse was closed yesterday, and we believe the FBM KLCI will play some catch up today after it ended below the crucial 1,600 last Friday. We expect bargain hunting activities to emerge thus anticipate the index to hover between the 1,600-1,615 range today. Expectations that the ECB may lower interest rates this Thursday will further improve trading sentiment regionally.

Source: Rakuten Research - 4 Jun 2024

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