Previous Day Highlights

The FBM KLCI tumbled and closed at its intraday low amid a regional meltdown. The benchmark index dived 4.63% or 74.57 pts to close at 1,536.48. All sectors were negative with property (-9.7%), technology (-9.1%), and construction (-9.0%) leading the losses. Market breadth was negative with 1,659 losers against 83 gainers. Total volume stood at 9.26bn shares valued at RM7.97bn.

Major regional markets closed sharply lower, following the extended US market rout. HSI sank 1.46%, to end at 16,698.36. SHCOMP plummeted 1.54%, to close at 2,860.70. Nikkei 225 crashed 12.40%, to finish at 31,458.42. STI plunged 4.07%, to close at 3,243.67.

Wall Street extended its downtrend, closing at its intraday low due to widespread selling activity and heightened recessionary fears. The DJIA plummeted 2.60%, to end at 38,703.27. Nasdaq plunged 3.43%, to close at 16,200.08. S&P500 tumbled 3.00%, to finish at 5,186.33.

News For The Day

BerjayaFood gets rights to operate Starbucks

Berjaya Food, its international arm has secured the rights to operate Starbucks stores in Iceland, Denmark and Finland. The expansion by Berjaya Food International, or BFI, marks the first entry of a Malaysian public-listed food-and-beverage company into Nordic markets. BFI will focus on local hiring and sourcing while lending its culinary and operational expertise. - The Edge Markets

Jati Tinggi bags RM33.8m EPCC sub-contract from Gamuda

Jati Tinggi Group secured an engineering, procurement, construction, and commissioning (EPCC) sub-contract worth RM33.8m from Gamuda’s wholly owned subsidiary, Gamuda Engineering SB. The sub-contract was awarded to its unit Jati Tinggi Holding SB, to provide horizontal directional drilling work in Gombak, Selangor. The duration of the contract is for 198 days, which shall commence on Aug 1, 2024 and be completed on Feb 15, 2025. -The Edge Markets

Notion VTec logs best quarterly earnings in six years

Notion VTec’s 3QFY9.24 logged an 11-fold YoY increase to RM20.25m from RM1.82m, on the back of higher revenue. This is Notion VTec's best quarterly net profit since 4QFY18, when it reported earnings of RM36.54m. Quarterly revenue increased 63% YoY to RM135.5m from RM83.2m, boosted by higher contributions from the HDD and electronic manufacturing services (EMS) segments.. -The Edge Markets

TALAMT to dispose of land to IJM as part of debt settlement

Talam Transform said it plans to dispose of a 27.72-acre piece of land in Sepang to a unit of IJM Corp as partial debt repayment. Its wholly owned subsidiary Talam Leisure Development SB has agreed to sell the land to Ever Mark (M) SB, a wholly owned subsidiary of IJM Properties SB. IJM Properties is a wholly owned unit of IJM Corp. The deal involves the setting off of RM66m of indebtedness, and a RM18m interest waiver on the debt owed by Talam Transform to IJM Properties. -The Edge Markets

Sasbadi gets contracts from MoE totalling RM11.7m

Sasbadi Holdings has accepted two letters of acceptance from the Education Ministry (MoE) totalling RM11.7m to supply reprinted textbooks. The group said the first contract, awarded to its wholly owned subsidiary Sasbadi SB has an estimated contract value of RM6.89m, while the second contract, awarded to its indirectly owned subsidiary The Malaya Press SB, is worth RM4.82m. The contracts are for the period from Aug 5, 2024 to Aug 4, 2026. -The Star

Our Thoughts

Wall Street’s meltdown continues as selling became more unrelenting with traders opting for “sell first, think later” concept amid recessionary fears in the US. As such, the DJIA lost a massive 1,034 points while the Nasdaq declined by 576 points with the US 10-year yield dropping to 3.778% or at a 52-week low. Notwithstanding this, the only positive we saw is that all 3 major indices closed off their intra-day lows. In Hong Kong, the HSI ended 250 points lower against a regional bloodbath backdrop especially in Japan that dived 12%. On the home front, the FBMKLCI declined to a 4-month low to below the 1,540 mark amid a regional bloodbath predominantly due to unloading of Yen carry trades. Nonetheless, we remain adamant that the selling was overdone as our market valuation is nowhere near those on Wall Street. Over the past two days, our market PER dipped from 15.4x to 14.6x currently, thus presenting an excellent opportunity for some value accumulation. For today, we believe selling may be less dramatic as Wall Street futures are all showing a rebound at time of writing hence expect the index to hover within the 1,500-1,550 range today.

Source: Rakuten Research - 6 Aug 2024

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