Previous Day Highlights

FBM KLCI retreated from its record high attributed to late profit taking activities. The benchmark index was down 0.24% or 3.86 pts to close at 1,625.96. Majority of sectors were negative with industrial products & services (-0.8%), technology (-0.7%), and telecommunications (-0.7%) leading the losses; while gainers were seen in energy (+0.5%), and plantation (+0.3%). Market breadth was negative with 795 losers against 413 gainers. Total volume stood at 4.66bn shares valued at RM3.52bn.

Major regional indices trended mixed amid strong rate cut hopes and concerns over China's lagging growth. HSI tumbled 1.60%, to end at 17,727.98. SHCOMP added 0.08%, to close at 2,976.30. Nikkei 225 climbed 0.20%, to finish at 41,275.08. STI declined 0.34%, to close at 3,487.91.

Wall Street continued with its uptrend and closed at a record high, spurred by small caps amid ongoing rate cut bets. The DJIA added 1.85%, to end at 40,954.48. Nasdaq rose 0.20%, to close at 18,509.34. S&P500 rose 0.64%, to finish at 5,667.20.

News For The Day

Maxis mulling U Mobile buyout

Maxis is considering buying out U Mobile SB to help it expand in Malaysia, according to people with knowledge of the matter. Maxis has expressed interest in U Mobile and talks are at an early stage. Businessman Tan Sri Vincent Tan Chee Yioun and Temasek Holdings Pte Ltd-backed Singapore Technologies Telemedia Pte Ltd are among U Mobile’s major shareholders. Pricing could be a hurdle to a potential buyout, with U Mobile’s owners seeking a valuation of more than RM10bn. There’s no guarantee that a deal will be reached, they said.-The Edge Markets

MAHB takeover offer expected to be finalised in 3Q

The takeover offer for Malaysia Airports Holdings or MAHB is expected to be finalised in 3Q24 and will need to be approved by at least 90% of MAHB's existing shareholders, the Ministry of Finance said. The ministry said that since the offer is a commercial transaction, it would not have any financial implications for the government. The government will continue to monitor this development and ensure that whatever decision reached later must be made in accordance with the laws and regulations currently in force.- The Edge Markets

Vestland to acquire properties worth RM25m

Vestland through its wholly-owned subsidiary, Vestland Resources SB has entered into several sale and purchase agreements (SPAs) with Sg Besi Construction SB and Armani KPF2 Development SB for the acquisition of 16 properties, totalling RM24.99m. Vestland inked 10 SPAs with Sg Besi Construction to acquire 10 office suites located at Shah Alam, Selangor for RM6.99mil. The group has also signed six SPAs with Armani for six units of semi-detached industrial warehouse/ factory at the Armani Business Park situated in Kota Kinabalu, Sabah for RM18m.-The Star

Kuchingko’s IPO oversubscribed by 99 times

Animation production house Kucingko, which is en route to listing on the ACE Market of Bursa Malaysia on July 26, 2024, said its initial public offering (IPO) has been oversubscribed by 99.02 times. It has received 21,929 applications for 2.5bn shares from the Malaysian public, compared with the 25m new shares made available for public subscription.-The Edge Markets

Our Thoughts

Wall Street closed higher underpinned by broad-based buying, pushing the DJIA to a record high as traders remained hopeful that the Fed will cut rates this September and a soft landing for the US economy supported by June’s retail sales which came in better than expected. As such, the DJIA surged 743 points while the Nasdaq was up 37 points with the US 10-year yield easing to 4.158%. In Hong Kong, the HSI dipped to below the 18,000 level again as sentiment was spooked by China’s gloomy economic outlook amid some downgrades on its growth. On the home front, the FBM KLCI failed to stay above the 1,630 mark again despite a strong start as sellers kept the uptrend at bay. Meanwhile, we also noticed that the absence of strong catalysts saw buying activities side-lined as depicted by the lower volume traded yesterday. Nonetheless, we expect the index to trend between the 1,625-1,635 range today taking cue from the robust Wall Street’s overnight performance and heightened likelihood of a rate cut in September. Meanwhile, gold prices surged to an all-time high on hopes of lower rates going forward.

Source: Rakuten Research - 17 Jul 2024

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