Previous Day Highlights

FBM KLCI closed lower due to late selling pressure. The benchmark index was down 0.58% or 9.13 pts to close at 1,576.46. Majority of sectors were negative with construction (-2.0%), technology (-0.8%), and industrial products & services (-0.8%) leading the losses; while gainers were seen in telecommunications (+1.1%), and consumer (+0.4%). Market breadth was negative with 588 losers against 400 gainers. Total volume stood at 3.45bn shares valued at RM2.7bn.

Major regional indices trended mixed. HSI was up 1.83%, to end at 19,219.78. SHCOMP increased 2.54%, to close at 3,791.70. Nikkei 225 declined 1.83%, to finish at 38,474.23. STI slid 0.08%, to close at 3,788.77.

Wall Street closed mixed as market evaluates the latest producer price report. The DJIA added 0.52%, to end at 42,518.28. Nasdaq eased 0.23%, to close at 19,044.39. S&P500 rose 0.11%, to finish at 5,842.91.

News For The Day

MOF approves digital banking license to YTL Digital Bank

The Finance Ministry has approved YTL Digital Bank Bhd, operating as Ryt Bank, to launch on Dec 20, 2024. A joint venture between YTL Digital Capital and Sea Ltd, Ryt Bank leverages AI for personalized, seamless financial services. Ryt AI, its private banking feature, simplifies banking, offers tailored insights, advanced savings strategies, and 24/7 assistance, redefining digital banking in Malaysia. – The Star

Yinson Production secures US$1bn investment

Yinson Holdings’ Yinson Production has secured a US$1bn investment via redeemable convertible preferred shares and warrants at a US$3.7bn valuation. Investors include ADIA, BCI, and RRJ Group. Proceeds will fuel FPSO market growth, renewables, and green tech expansion, with US$200m for shareholder returns. The deal, among Southeast Asia's largest, is set to close in 1Q25, pending approvals. - The Star

Atlan's 3QFY2/25 net profit jumps 3x

Atlan's 3QFY2/25 net profit tripled to RM29.9m, driven by a RM69.6m land sale by its 75.53%-owned Duty Free International Ltd to Malaysia’s Home Ministry. After RM25.34m in disposal costs, the closure of its Bukit Kayu Hitam duty-free business from November 2024 is expected to impact future revenue and profitability. Atlan declared a doubled interim dividend of eight sen, payable Feb 17. - The Edge Market

Theta Edge ends AI pact with iStream

Theta Edge's subsidiary, Theta Innovation, has ended its joint venture with iStream360 to develop AI and blockchain solutions. The mutual termination, which incurs no cost or legal implications, was deemed in Theta's best interest. The JV initially aimed to form a 51:49 firm for future AI and blockchain projects but has now been discontinued by mutual agreement. – New Straits Times Oriental Kopi IPO oversubscribed by 59.96 times Oriental Kopi Holdings’ IPO, ahead of its ACE Market listing on Jan 23, was oversubscribed by 59.96 times. The public portion saw 3.65bn shares applied for, with Bumiputera shares oversubscribed by 22.20 times and other public shares by 97.72 times. Additionally, shares for eligible persons, Bumiputera investors, and selected investors through private placements were fully subscribed, reflecting strong market interest. – The Star

Our Thoughts

It was another mixed day on Wall Street as the unloading on big tech stocks persisted despite the lower than expected PPI (producer price index) as traders are looking at today’s CPI figure. Meanwhile, the US 10-year yield remains high at 4.794%. Over in Hong Kong, the HSI added almost 350 points to close above the 19,000 mark following reassuring remarks from China’s securities regulator that it will stabilize the market after a wobbly start to 2025. Back home, the FBM KLCI ended in negative territory attributed to late selling activities. The index was trending positively throughout yesterday’s session but succumbed to selling pressure in the final hour. We were surprised by the sudden sell-down and may have been instigated by foreign funds. Nonetheless, we believe a quick rebound is required, hence anticipate the index to hover between the 1,575-1,585 range today. At current level, market valuations are at a cheap 14.5x vs historical average of 16.5x.

Source: Rakuten Research - 15 Jan 2025

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