Previous Day Highlights

FBM KLCI closed slightly lower as sentiment remained cautious amid some profit taking activities. The benchmark index eased 0.08% or 1.32 pts to close at 1,624.25. Gainers were seen in energy (+0.60%), financial services (+0.59%), and REIT(+0.24%); while losers were seen in construction (-0.56%), industrial products & services (-0.52%), and property (-0.48%). Market breadth was negative with 654 losers against 442 gainers. Total volume stood at 3.51bn shares valued at RM2.71bn.

Major regional indices closed on negative territory, possibly due to the heightening tension in the middle east. HSI slipped 0.23%, to end at 17,304.96. SHCOMP dropped 0.22%, to close at 2,932.39. Nikkei 225 dived 2.49%, to finish at 38,126.33. STI lost 1.04%, to close at 3,419.84.

Wall Street tumbled as weaker economic data reignited recession fears. The DJIA fell by 1.21%, to end at 40,347.97. Nasdaq slumped 2.30%, to close at 17,194.14. S&P500 tumbled 1.37%, to finish at 5,446.68.

News For The Day

F&N's 3Q net profit up 22% on absence of fair value loss

Faser & Neave Holdings' 3QFY9/24 net profit rose 22.4% YoY to RM121.63m from RM99.37m, when there were one-off non- operating items. “Excluding these items, the adjusted group operating profit for 3QFY24 is flat against 3QFY23,” said F&N. Revenue dropped 2.08% YoY to RM1.3bn from RM1.33bn attributed to geopolitical uncertainties affecting exports from Malaysia and unfavourable currency translation resulting from a weakening baht.-The Edge Markets

YTL Hospitality REIT’s 4Q NPI up 9.7%

YTL Hospitality Real Estate Investment Trust (YTLREIT) reported its 4QFY6/24 net property income (NPI) increased 9.7% YoY to RM65.8m from RM59.9m, driven by higher contributions from both the hotel and property rental segments. Quarterly revenue grew 10.7% YoY to RM130.2fm rom RM117.6m. The REIT declared a final income distribution of 4.09 sen per unit for the 2HFY24 to be paid on Aug 30. This brings the total FY24 distribution to 8.27 sen per unit, up 11.2% from FY23's 7.44 sen.-The Edge Markets

Pentamaster's 2Q profit drops 16% as sales volume dips

Pentamaster Corp’s 2QFY12/24 net profit fell 15.87% YoY to RM19.9m from RM23.65m, as its biggest revenue contributor, the automated test equipment (ATE) segment recorded lower sales volume, higher employee expenses, provisions for slow- moving inventories, and research and development expenditure for certain projects. Quarterly revenue dipped 3.11% YoY to RM171.37m from RM176.88m.-The Edge Markets

Pekat buys 60% stake in switchgears supplier for RM96m

Pekat Group is buying a 60% stake in Apex Power Industry SB for RM96m. Apex Power and its wholly owned unit EPE Switchgear SB are among Malaysia’s largest manufacturers of medium voltage electrical switchgears, and are also involved in manufacturing, engineering and project activities within the power sector. Apex Power has provided an aggregated profit guarantee of not less than RM48m for the combined periods in FY24 to FY26.-The Edge Markets

MN Holdings wins RM86m contract from TNB

MN Holdings’ wholly-owned subsidiary, MN Power Transmission SB has secured a contract worth RM86m from Tenaga Nasional (TNB). MNHB said the contract involves the supply, erection, and commissioning of a 132/11-kilovolt Kg Awah GIS, including remote end substations work, complete with relevant secondary and ancillary equipment, as well as associated civil works. -The Star

Our Thoughts

Wall Street slumped as sentiment was spooked by the latest spate of economic data where many fears may be recessionary and not the soft landing that the Federal Reserve is striving for. The higher than expected weekly initial jobless claims and lower manufacturing index saw the US 10-year yield dipped to 3.981% indicating that funds are shifting out of equities and into bonds. Over in Hong Kong, the HSI closed marginally lower following the unexpected manufacturing activity data from China which shrank for the first time in 9 months. Back home, the FBM KLCI ended slightly lower as sellers remained very much in the forefront. Though surprised, we reckon prevailing unloading can also be attributed to the escalating tension in the middle east amid a regional weakness. As such, we believe market undertone may have turned cautious after the sell-off on Wall Street thus anticipate the index to hover within the 1,620-1,630 range today. Meanwhile, it is worthwhile noting that the MYR has strengthened to RM4.57/USD1 which is a YTD high against the greenback.

Source: Rakuten Research - 2 Aug 2024

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