Previous Day Highlights

25 July 2024 FBM KLCI closed lower in tandem with the downbeat regional market performance as uncertainty escalated amid the global sell-off. The benchmark index down 0.52% or 8.54 pts to close at 1,621.14. Majority of sectors were negative with industrial products & services (-1.6%), construction (-1.5%), and property (-1.1%) leading the losses; while gainers were seen in REIT (+0.1%), and transportation (+0.1%). Market breadth was negative with 773 losers against 341 gainers. Total volume stood at 4.39bn shares valued at RM2.8bn.

Major regional indices trended broadly negative. HSI lost 0.91%, to end at 17,311.05. SHCOMP dropped 0.46%, to close at 2,901.95. Nikkei 225 slumped 1.11%, to finish at 39,154.85. STI eased 0.01%, to close at 3,460.82.

Wall Street slumped dragged down by disappointing earnings from megacap tech. The DJIA fell 1.25%, to end at 39,853.87. Nasdaq plunged 3.64%, to close at 17,342.41. S&P500 dived 2.31%, to finish at 5,427.13.

News For The Day

United Plantations 2Q net profit up 17%

United Plantations Bhd's 2QFY6/24 net profit rose 17% YoY to RM185.94m from RM159.02m on higher profits from its plantation and refinery segments. Quarterly revenue came in 16% higher YoY at RM546.08m from RM470.07m, due to the increase in revenue for the plantation and refinery segments in the current quarter, mainly as a result of higher crude palm oil and palm kernel prices. No dividend was proposed for 2QFY24. -The Edge Markets

AME Elite sells 4 Johor properties to AME REIT for RM119.5m

AME Elite Consortium is selling four industrial properties in Johor to its 49.62%-owned unit AME Real Estate Investment Trust for RM119.5m to realign its property investments into a REIT. Its subsidiary Pentagon Land SB and its 80%-owned subsidiary Ipark Development SB had inked separate sale and purchase agreements with AME REIT for the disposal. AME REIT said it will finance the deal via financing facilities. -The Edge Markets

CapitaLand (M) Trust's 2Q NPI jumps 15.2% to RM65.47m

CapitaLand Malaysia Trust’s reported its 2QFY12/24 net property income jump 15.2% YoY rose to RM65.47m from RM56.83m, as most of the malls within its portfolio recorded higher revenue as a result of positive rental reversions and higher occupancies. Quarterly gross revenue rose 8.5% YoY to RM113.65m from RM104.76m. It announced a distribution per unit of 1.17 sen.-The Edge Markets

MN Holdings bags RM136m substation contract

MN Holdings’ wholly-owned subsidiary MN Power Transmission SB has secured a substation engineering contract worth RM136.2m in Johor, from a customer that provides data centre services (Customer A). The contract shall commence in July 2024 and target for completion by June 2025. The contract scope of work comprises design, supply, installation, maintenance, testing and commissioning for a new 275 kilovolt (kV) consumer landing station (CLS). With the latest job win, its outstanding order book increased to a total value of RM568.5m. -The Star

Gadang narrows 4Q losses on higher construction revenue

Gadang Holdings 4QFY5/24 net loss narrowed to RM9.37m YoY from RM27.7m, as revenue expanded due to higher contributions from its construction division. Revenue rose 32% YoY to RM150.5m from RM114m. No dividend was declared during the quarter under review. -The Edge Markets

Our Thoughts

Wall Street finished sharply lower following a weak start to the megacap earnings season, leading to concerns that the artificial intelligence enthusiasm driving the bull market may be overhyped. The DJIA closed over 500 points lower, while the S&P 500 saw its worst day since December 2022 due to a major tech selloff, ending its best run without a 2% drop since the onset of the global financial crisis. The Nasdaq 100 experienced even more significant losses, declining by over 3.5%. In Hong Kong, stocks reached their lowest point in three months due to increasing concerns that corporate earnings may not meet expectations. The Hang Seng Index dropped 0.9% to close at 17,311.05, the lowest level since April. In the domestic market, the FBM KLCI fell in tandem with the regional sell-off. Nonetheless, we view this as a chance for investors to find bargains in lower-priced stocks. The index has maintained its position above all Exponential Moving Averages (EMA), indicating an increasing potential for upward movement for longer term. Consequently, we predict the benchmark index will range between 1,610 and 1,625 today.

Source: Rakuten Research - 25 Jul 2024

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