Previous Day Highlights

FBM KLCI closed marginally lower amid a rally amongst the glove stocks. The benchmark index was down 0.17% or 2.65 pts to close at 1,603.23. Majority of sectors were negative with plantation (-0.7%), construction (-0.6%), and industrial products & services (-0.5%) leading the losses; while gainers were seen in health care (+9.6%), and technology (+1.1%). Market breadth was mixed with 579 losers against 574 gainers while 475 were unchanged. Total volume stood at 6.2bn shares valued at RM4.7bn.

Major regional indices trended mixed. SHCOMP dropped 0.82%, to close at 3,119.90. Nikkei 225 up 0.08%, to finish at 38,385.73. STI fell by 0.72%, to close at 3,289.42. Meanwhile, HIS closed for Buddha's Birthday.

Wall Street rallied spurred by lower than expected CPI figure. The DJIA added 0.88%, to end at 39,908.00. Nasdaq rose 1.40%, to close at 16,742.39. S&P500 surged 1.17%, to finish at 5,308.15.

News For The Day

MAHB confirms getting privatisation offer at RM11 per share

Malaysia Airports Holdings confirmed that it has received a takeover offer from a consortium led by its major shareholder Khazanah Nasional and the Employees Provident Fund, in a deal worth over RM12bn. The other parties in the consortium that is planning to take MAHB private are New York-based Global Infrastructure Partners and Abu Dhabi Investment Authority. The airport operator said the consortium, dubbed as Gateway Development Alliance SB is offering RM11 per share to acquire all the remaining 1.12bn.-The Edge Markets

Hume Cement posts best quarterly earnings in two decades

Hume Cement Industries reported record net profit for its 3QFY6/24 more than doubled to RM61.07m from RM27.01m YoY, on the back of lower manufacturing costs, and higher cement price and sales volume. Its 3QFY24 net profit, while revenue increased 7.4% YoY to RM310.4m from RM289m. Hume Cement declared a second interim dividend of 6 sen per share. -The Edge Markets

AEON kicks-off FY24 with 50% profit jump as revenue climbs

AEON Co (M) reported its 1QFY24 net profit jumped 50.3% YoY to RM57.39m from RM38.18m, which it attributed to higher revenue and effective cost management. Revenue rose 5.47% to RM1.17bn from RM1.11bn.-The Edge Market

Southern Steel posts fourth straight quarterly loss in 3Q

Southern Steel posted its fourth consecutive quarter net loss for 3QFY6/24 due to lower average selling prices (ASP) and sales volume. The steel mill reported its 3QFY24 net loss of RM6.43m in contrast to its net profit of RM1.66m YoY. Its revenue for the quarter dropped 15.4% YoY to RM551.66m from RM652.06m.-The Edge Markets

MHB gets RM174m hospital development job

Mitrajaya Holdings (MHB) has accepted a letter of award from Avisena Healthcare SB for the development of a hospital block comprising 11 floors in Shah Alam, Selangor, for RM174.30m. MHB said the contract is for a duration of 36 months from the date for possession of the site on May 23, 2024 and is expected to complete by May 21, 2027.-The Star

SNS Network gets SC nod for Main Market transfer

SNS Network Technology has obtained approval from the Securities Commission (SC) for its transfer to the Main Market of Bursa Malaysia Securities. Barring any unforeseen circumstances, the transfer to the Main Market would be completed in 3Q24.-The Star

Our Thoughts

Wall Street closed on record highs spurred by lower than expected consumer price index (CPI) and retail sales for April thus re-igniting hopes that the Federal Reserve will cut rates in the near future. As a result, the DJIA gained 350 points while the Nasdaq added 231 points as the US 10-year yield eased to 4.344%. In Hong Kong, the HSI closed lower after a strong opening following the US imposition of more tariffs on Chinese goods amid the escalating tension between the 2 superpowers. Back home, the FBM KLCI ended in negative territory as sellers emerged ahead of the economic data from the US. Nonetheless, we expect an uptick in the index emanating from Wall Street’s strong closing overnight hence anticipate the index to hover between the 1,605-1,615 range today. Trading on rubber glove stocks took the limelight yesterday buoyed by the US tariff imposition on Chinese goods which will only take effect in 2 years. Therefore, we see yesterday’s euphoria as only a knee jerk reaction and advocate investors to be vigilant.

Source: Rakuten Research - 16 May 2024

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