Previous Day Highlights

FBM KLCI closed higher due to buying support. The benchmark index up 0.14% or 2.25 pts to close at 1,599.58. Gainers were seen in health care (+2.61%), transportation (+0.21%), and industrial products & services (+0.20%); while losers were seen in telecommunications (-0.57%), technology (-0.44%), and financial services (-0.21%). Market breadth was negative with 501 losers against 480 gainers. Total volume stood at 2.55bn shares valued at RM2.3bn.

Major regional indices trended mixed. HSI gained 0.83%, to end at 19,864.55. SHCOMP increased 0.62%, to close at 3,382.21. Nikkei 225 eased 0.72%, to finish at 39,081.71. STI slid 0.53%, to close at 3,779.62.

Wall Street closed lower after Fed signals slower pace of rate cuts. The DJIA dropped 2.58%, to end at 42,326.87. Nasdaq plunged 3.56%, to close at 19,392.69. S&P500 eased 2.95%, to finish at 5,872.16.

News For The Day

EcoWorld, SD Guthrie and NS Corp collab

Eco World Development, SD Guthrie, and Negeri Sembilan’s NS Corporation will jointly develop a 1,166-acre industrial park in Bukit Pelanduk, Negeri Sembilan, with an estimated GDV of RM2.95bn. The eight-year project, part of Malaysia Vision Valley 2.0, will feature industrial lots, factories, and commercial properties, supporting high-growth sectors like aerospace, E&E, logistics, and biotechnology. - The Edge Market

Scientex’s 1QFY25 net profit down 6.7%

Scientex's 1QFY25 net profit fell 6.7% YoY to RM128.6m due to lower profits from its packaging segment. The property division was the key performance driver, driven by steady construction progress across the Northern, Central, Melaka, and Johor regions, coupled with strong take-up rates for ongoing projects. Scientex has a final dividend of 6 sen per share in respect of FY24. - New Straits Times

Advancecon bags RM417.7m job at Perak

Advancecon Holdings has secured a RM417.7m contract as the main contractor for the development of the Silver Valley Technology Park (SVTP) in Perak. With the new contract, the company's unbilled order book increased to RM739.3m as of Sept 30, 2024. The contract spans 36 months from the commencement date and encompasses a comprehensive scope of work. The Silver Valley Technology Park is a transformative initiative that will drive industrial and technological advancements in Perak Darul Ridzuan. – New Straits Times

Quality Concrete bags RM75m contract in Sarawak

Quality Concrete Holdings secured a RM75m construction contract in Kuching, Sarawak, through its unit QC Construction & Engineering. The two-year project comes amid financial challenges, as the company posted a 3QFY25 net loss of RM6.6m, widening from RM61,000 last year, with revenue falling 27.4% to RM38.1m due to weaker construction division performance. – The Edge Market

Northern Solar eyes solar energy expansion post-IPO

Northern Solar Holdings, bound for the ACE Market, plans to raise RM64.8m through its IPO, with RM32.3m allocated to fund a new corporate headquarters and expand its "develop- own-operate" solar PV portfolio for stable revenue. Targeting Johor and Penang alongside Klang Valley, the company holds an unbilled order book exceeding RM70m and a RM1bn tender book as of Nov 19. – The Edge Market

Our Thoughts

Wall Street slumped as traders unloaded their positions on heightening concerns over interest rates, which may stay elevated indefinitely. This came after the Federal Reserve indicated that there will be only 2 rate cuts in 2025 after reducing the overnight rate by 25bps. Meanwhile, the US 10-year yield closed higher at 4.52%. Over in Hong Kong, the HSI finally arrested its recent weakness to close broadly higher on optimism to China’s latest proposal to guide state-owned companies to improve and unlock their values while halving service fees for dividend payouts. Back home, the FBM KLCI ended marginally higher to just below the 1,600 mark amid hints of bargain hunting activities in support of the local bourse. Taking cue from the declines on Wall Street, we expect some knee-jerk reaction from the regional markets but expect foreign funds to seek for safer haven which should re-divert funds back to Asia where valuations are more alluring. As such, we expect the index to hover within the 1,590-1,610 range today.

Source: Rakuten Research - 19 Dec 2024

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