Previous Day Highlights

FBM KLCI closed lower amid ongoing cautious sentiment ahead of the long holiday. The benchmark index was down 0.18% or 2.85 pts to close at 1,607.32. Majority of sectors were negative with energy (-2.4%), technology (-1.6%), and construction (-0.9%) leading the losses; while gainers were seen in transportation (+0.5%), and financial services (+0.1%). Market breadth was negative with 677 losers against 561 gainers. Total volume stood at 5.64bn shares valued at RM3.92bn.

Major regional indices trended negatively. HSI slid 0.03%, to end at 17,936.12. SHCOMP dropped 0.55%, to close at 3,015.89. Nikkei 225 plummeted 1.83%, to finish at 38,102.44. Meanwhile, STI was closed for Hari Raya Haji.

Wall Street closed higher, led by the mega tech counters ahead of new economic data. The DJIA climbed 0.49%, to end at 38,778.10. Nasdaq rose 0.95%, to close at 17,857.02. S&P500 elevated 0.77%, to finish at 5,473.23.

News For The Day

Robert Kuok’s PPB acquires 15% stake in Techbond

PPB Group has emerged as a substantial shareholder of Techbond Group after acquiring a 15% stake in the company on Friday. PPB said it had acquired over 82.9m shares and over 34m unexercised warrants in Techbond from Sonicbond SB via a direct business transaction for RM37.67m. The shareholding will remain the same, PPB said, if it exercises all its warrants and assuming all other warrants are also exercised, but its total consideration for the acquisition will increase to RM48.9m. -The Edge Markets

Fire breaks out at Resorts World Genting

Genting Malaysia said a fire broke out at 4.30pm on Friday at SkyAvenue, Resorts World Genting, the integrated resort in Genting Highlands. The rest of the resort was unaffected. Evacuation procedures were promptly executed to ensure the safety of the public, according to Genting Malaysia. There were no reports of casualties. -The Edge Markets

Hibiscus proposes RM1.2bn takeover of TotalEnergies Brunei

Hibiscus Petroleum through its subsidiary Simpor Hibiscus SB has signed a conditional share sale agreement with TotalEnergies Holdings International B.V. to takeover TotalEnergies EP (B) B.V for RM1.2bn (US$259.4m) cash. TotalEnergies Brunei owns a 37.5% operated interest in Block B Maharajalela Jamalulalam (MLJ) field. The exercise will bring the gas production share of the group’s portfolio to almost 50%, in line with the group’s strategy of acquiring gas-weighted assets in stable regulatory jurisdictions. – NST

GUH scraps lithium battery project with Chinese partner

GUH Holdings has scrapped a plan to develop a lithium battery assembly plant in Malaysia. The company and its joint venture (JV) partner, Chinese battery manufacturer Shenzhen Xixin Electronic Technology Co Ltd, have mutually agreed to terminate the agreement signed in November last year. No battery assembly plant has been established, no equipment has been purchased, and no shares in the JV have been transferred to Xixin pursuant to the cooperation agreement.- The Edge Markets

Oriental Kopi files for ACE Market IPO for expansion

Oriental Kopi Holdings, which operates a cafe chain and sells packaged food, has filed for an initial public offering (IPO) on the ACE Market to raise funds to add the number of outlets, set up new kitchens and stores. The proposed IPO comprises entirely of public issue of 418.1m new shares at a price to be determined later.-The Edge Markets

Our Thoughts

Wall Street closed higher due mainly to follow through buying last week with the S&P recorded a fresh new high. While traders are waiting for the latest retail sales data today, the DJIA gained 189 points while the Nasdaq jumped 168 points higher as the US 10-year yield inched higher at 4.285%. In Hong Kong, the HSI pared earlier gains as profit taking activities emerged amid a mixed set of economic data from China. As for the FBM KLCI, after a couple of days consolidating, we believe the benchmark index to reverse its direction and expect it to hover between the 1,610-1,620 range today attributed to bargain hunting activities. Again, outlook for corporate Malaysia is improving premised on the broad-based upward revision in earnings growth to 8.2% for 2025 following a respectable 16.1% growth for this year. Meanwhile, crude oil prices rebounded as the Brent crude price trends closer to US$85/barrel underpinned by improving demand outlook.

Source: Rakuten Research - 18 Jun 2024

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