Previous Day Highlights

FBM KLCI closed higher as bargain hunting emerged following the heavy selloff yesterday. The benchmark index was up 0.47% or 7.61 pts to close at 1,629.68. Majority of sectors were positive with construction (+2.0%), property (+1.7%), and energy (+1.2%), leading the gains; while losers were seen in plantation (-0.1%). Market breadth was positive with 685 gainers against 458 losers. Total volume stood at 5.12bn shares valued at RM3.59bn.

Major regional indices trended broadly lower except STI which climbed 0.70%, to close at 3,461.16. HSI lost 0.94%, to end at 17,469.36. SHCOMP slumped 1.65%, to close at 2,915.37. Nikkei 225 eased 0.01%, to finish at 39,594.39.

Wall Street closed lower with Big Tech earnings on deck. The DJIA dropped 0.14%, to end at 40,358.09. Nasdaq eased 0.06%, to close at 17,997.35. S&P500 eased 0.16%, to finish at 5,555.74.

News For The Day

YTL Cement to acquire stake in NSL to expand IBS business

YTL Cement, a unit of giant conglomerate YTL Corp is planning to buy an 81.34% stake in Singapore-listed NSL Ltd for RM792.32m cash, to expand its industrialised building systems (IBS) business. NSL is a management and investment holding company whose subsidiaries manufacture building materials, oil and petroleum products, and provide environmental services. YTL Cement is buying the stake, comprising 303.48m shares in NSL, from 98 Holdings Pte Ltd at RM2.61 per share or a total of RM792.32m. -The Edge Markets

IOI Properties to buy Tropicana Gardens Mall for RM680m

Tropicana Corp has signed a sale and purchase agreement (SPA) with IOI Mall Damansara SB (IOI MD) for the sale of Tropicana Gardens Mall for RM680m. Tropicana said its indirect 70%-owned subsidiary, Tropicana Indah SB (TISB) signed the SPA with IOI MD, a wholly-owned subsidiary of IOI Properties Group (IOIPG) for the disposal. The disposal will allow the company to monetise its investment property, with the sale proceeds substantially reducing debt, improving cash flow, and lowering interest expenses. -The Star

Axis REIT's net property income up 12.9%

Axis Real Estate Investment Trust's (Axis REIT) 2QFY12/24 net property income (NPI) increased 12.86% YoY to RM65.95m from RM58.44m, on the back of higher revenue. Quarterly revenue rose 11.8% YoY to RM76.53m from RM68.45m. It declared a second interim income distribution of 2.25 sen per unit, payable on Aug 30.-The Edge Markets

Uzma’s Thai subsidiary secures RM19m contract with PTTEP

Uzma’s foreign subsidiary, MMSVS Group Holding Co Ltd Thailand, has accepted a contract award from PTTEP Energy Development Co Ltd to undertake the infill well preparation operations for up to six of PTTEP’s offshore platforms in the Gulf of Thailand. The contract is from July 16, 2024 and shall remain valid until July 15, 2025 and is estimated to be worth RM19m during the contract period. The scope of works comprises the provision of hydraulic workover unit equipment and services. -The Star

Varia bags sewerage plant subcontract worth RM555m

Varia had secured a construction subcontract worth RM555m. Under the subcontract, Varia will supply labour, plants, materials, equipment, tools, transport, temporary works and ancillary needed to build a sewage treatment plant in Penang. The contract is for a period of 57 months and expected to complete by March 24, 2029. -The Edge Markets

Our Thoughts

Wall Street closed slightly lower following a choppy session as traders are weighing on results due from Alphabet and Tesla which came in mixed after the closing bell. While Alphabet beat street’s estimates, Tesla earnings were lower than forecast. Meanwhile, the DJIA lost 57 points while the Nasdaq declined by 10 points as the US 10-year yield stayed flat at 4.253%. In Hong Kong, the HSI drifted lower as sentiment remained cautious while waiting for more easing policies from China. BYD and its affiliates took a hit as Warren Buffet’s Berkshire Hathaway reduced its stake in the EV maker to below 5%. Back home, the FBM KLCI rebounded to within the crucial 1,630 mark as bargain hunters returned pushing the daily volume traded above the 5bn shares level. We remain positive that interest in the local bourse to persists despite the recent unloading by foreign funds. As such, we expect the index to hover within the 1,625-1,635 range today.

Source: Rakuten Research - 24 Jul 2024

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