Previous Day Highlights

FBM KLCI retraced from earlier gains to close at its intraday low as profit-taking continued. The benchmark index was down 0.16% or 2.54 pts to close at 1,608.95. Majority of sectors were negative with transportation (- 1.7%), energy (-1.2%), and utilities (-0.7%) leading the losses; while gainers were seen in technology (+2.1%), and telecommunications (+0.5%). Market breadth was negative with 758 losers against 550 gainers. Total volume stood at 7.59bn shares valued at RM5.28bn.

Major regional indices trended broadly lower. HSI plunged 1.31%, to end at 17,937.84. SHCOMP gained 0.31%, to close at 3,037.47. Nikkei 225 lost 0.66%, to finish at 38,876.71. STI slid 0.05%, to close at 3,307.44.

Wall Street closed mostly higher following a lower CPI data despite Fed’s hawkish stance. The DJIA slipped 0.09%, to end at 38,712.21. Nasdaq surged 1.53%, to close at 17,608.44. S&P500 mounted 0.85%, to finish at 5,421.03.

News For The Day

Johor Plantation's IPO to raise RM735m

Johor Plantations Group initial public offer (IPO) on the Main Market of Bursa Malaysia is expected to raise a total of RM735m, of which approximately RM345.2m will be raised via an offer for sale of 411m existing shares held by its sole shareholder Kulim (M). Kulim, a wholly-owned subsidiary of Johor Corp (JCorp), will retain a 65% stake in JPG upon listing on July 9, while the IPO would offer investors up to 35% of JPG's enlarged share capital. -The Edge Markets

HSS Engineers bags RM21m water treatment plant project

HSS Engineers’ associate, SMHB SB, has agreed to conduct engineering consultancy services for the phase one construction project of the Sungai Karangan water treatment plant in Kulim, Kedah, with an estimated service value of RM20.86m. The contract, set to commence in June 2024 with an expected completion date of June 2027, will see SMHB conducting a detailed study, engineering investigation, design, tender preparation and supervision during the construction of the water treatment plant.-The Star

BHIC secures RM1.1bn contract for navy service support

Boustead Heavy Industries Corp has secured a RM1.1bn contract from the Ministry of Defence to provide in-service support 2 performance for the Royal Malaysian Navy’s prime minister class submarines. A formal contract between the government and BHIC's wholly owned subsidiary, BHIC Submarine Engineering Services SB, will be executed at a later date. -The Edge Markets

Ecoscience secures RM61.8m contract for plant construction

Ecoscience International has secured a RM61.8m contract for the construction of a crude palm oil (CPO) pretreatment plant and a plant, machinery, and equipment (PME) plant in Port Dickson. Its wholly owned subsidiary Ecoscience Manufacturing & Engineering SB has accepted a letter of award from Oiltek SB to undertake the engineering, procurement, construction, and commissioning of civil and structural works for a CPO pretreatment plant and a PME plant, along with auxiliary buildings at the Port Dickson refinery – The Edge Markets

Iqzan Holding secures project worth RM143m

Iqzan Holding has secured a construction project worth approximately RM143m via its subsidiary, Kacon Construction SB (KCSB). The project entails the construction of a 24-storey office building in Jalan Tun HS Lee, Kuala Lumpur, is expected to positively contribute to the earnings of the Iqzan group for financial years FY25 to FY27.-The Star

Our Thoughts

It was another confusing day on Wall Street as both the Nasdaq and S&P 500 closed on record highs while the DJIA ended in negative territory. Sentiment was buoyed but May’s lower than expected CPI data but at the same time dampened by the Federal Reserve’s indication of possibly only one cut in rates this year. In tandem with the cooling inflation figure, the Fed kept interest rates unchanged as the US 10-year yield eased to 4.318%. Over in Hong Kong, the HSI declined to below the 18,000 mark as selling gathered momentum following China’s latest inflation data that signals weak demand. Meanwhile, the EU’s imposition of more tariffs on Chinese EVs next month to a tune of 48% would see negative implications for such carmakers on the mainland. Back home, the FBM KLCI ended lower despite a strong opening amid a mixed regional performance. Nonetheless, we believe buyers should emerge today after the broader market resurgence on Wall Street overnight thus expect the benchmark index to hover between the 1,610-1,625 range.

Source: Rakuten Research - 13 Jun 2024

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