Previous Day Highlights

FBM KLCI closed higher due to improving sentiment following the rate cut by the Fed. The benchmark index was up 0.30% or 5.06 pts to close at 1,665.65. Majority of sectors were positive with construction (+3.8%), technology (+2.7%), and telecommunications (+2.0%), leading the gains; while losers were seen in health care (- 0.7%), and financial services (-0.2%). Market breadth was positive with 898 gainers against 322 losers. Total volume stood at 4bn shares valued at RM4.1bn.

Major regional indices trended higher. HSI gained 2.0% to close at 18,013.16. SHCOMP rose 0.7% to close at 2,736.02. Nikkei 225 was up 2.1% to close at 37,155.33. STI rose 1.1%, to close at 3,633.18.

Wall Street closed higher due to the launch of its long- awaited monetary easing phase. The DJIA added 1.26%, to end at 42,025.19. Nasdaq rose 2.51%, to close at 18,013.98. S&P500 rose 1.70%, to finish at 5,713.64.

News For The Day

EcoWorld's 3QFY10/24 profit jumps 21%

Eco World Development Group’s 3QFY10/24 net profit rose 21.26% YoY to RM80.4m, driven by improved earnings contributions from its Malaysian operations. EcoWorld declared a second interim dividend of 2sen per share, payable on Oct 23. Meanwhile, the group said its financial position has strengthen 14.9% YoY to RM657.6m cash generated from operating activities in 9MFY24. – The Edge Markets

Ancom Nylex acquires 70% stake in Colorex

Agricultural and industrial chemicals manufacturer Ancom Nylex is acquiring a 70% stake in Colorex for RM14m cash. The proposed acquisition comes with a profit guarantee by Loke and Lim that Colorex shall achieve a PAT of no less than RM2.5m for two consecutive years. On the other hand, this proposed acquisition also diversifies the earnings of the business within the chemicals segment. Simultaneously, this solidifies their position as a fully integrated chemical group in Southeast Asia. – The Edge Markets

United Malacca’s 1QFY4/25 net profit surges

United Malacca’s 1QFY4/25 net profit surged by nearly 5 times to RM13.3m. The surge in net profit came on the back of higher crude palm oil (CPO) and palm kernel (PK) average prices. The company did not declare any dividend for the latest quarter. Moving forward, United Malacca expects its fresh fruit bunches production to increase in the current FY25, driven by a better palm tree age profile and improved operational efficiency. - The Edge Markets

Pharmaniaga to raise FY26 gross margin to 30%-35%

Pharmaniaga newly launched biopharmaceutical plant is expected to lift its gross profit margin to about 30% to 35% for FY26. The plant, located in Puchong has an annual production capacity of up to 30m doses of human insulin. Pharmaniaga recorded its 1HFY24 net profit of RM28.4m marking a return to profitability after two consecutive years of losses. - The Edge Markets

SSF’s 1QFY4/25 net profit more than halved

SSF’s 1QFY4/25 net profit slid more than halved YoY to RM1.25m amid softer consumer demand. Despite operating in challenging economic environment, SSF Home has continued with its expansion plans. The group opened a new outlet in Danga Utama, JB, bringing the total number of outlets nationwide to 43. This strategic growth positions the group for sustained success in the retail market. – The Edge Markets

Our Thoughts

Wall Street closed at record highs as traders are convinced that the US economy is set for a soft landing in view of the latest jobless claims data which came in lower than expected. As a result, the DJIA jumped by 522 points while the Nasdaq surged by 441 points as the US 10-year yield inched marginally higher at 3.719%. Trading on the Hong Kong market resumed with a big bang as the HSI surged past the 18,000 mark for the first time in 2 months, spurred by the massive 50bps cut in Fed rate. Property developers led the rally as lower interest rates may stimulate interests in properties purchases. Back home, the FBM KLCI closed higher due mainly to late buying activities after a slow start. The strong momentum can also be attributed to the broad rally across the ASEAN region. For today, we expect the index to hover within the 1,665-1,680 range. Meanwhile, the Ringgit continues to strengthen against the USD currently trending at 4.21 or around a 30-month high.

Source: Rakuten Research - 20 Sep 2024

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